Shares of IDFC soared 9 percent intraday on Thursday as it got Reserve Bank of India’s in-principle nod for a bank licence . Among a list of 25 hopefuls, the infrastructure finance company IDFC and Kolkata-based microfinance firm Bandhan obtained the much-eyed licence.
As per the norms, the “in-principle” approval is valid for a period of 18 months during which the applicant has to comply with the requirements under the RBI guidelines. Speaking to CNBC-TV18 , IDFC Executive Chairman Rajiv Lall said IDFC already has 21 percent Tier-1 capital and he believes it ‘will be the best capitalised start-up bank in India’.
The RBI originally received 27 applications in July 2013, after which Tata Sons and Videocon Group withdrew, leaving 25 contenders in the fray. Nitin Kumar, banking & financials analyst, Quant Capital feels the company may now see a reduction in FII shareholding and its ROE (return on equity) may reduce in the days to come. “The fact that only two candidates have got the license and IDFC has been one of the chosen one, that should lead to more buying. However, on a longer-term basis, over the next 18 months we may see further reduction in Foreign Institutional Investors (FIIs) holdings in the stock,” he adds.
As per the norms, the “in-principle” approval is valid for a period of 18 months during which the applicant has to comply with the requirements under the RBI guidelines. Speaking to CNBC-TV18 , IDFC Executive Chairman Rajiv Lall said IDFC already has 21 percent Tier-1 capital and he believes it ‘will be the best capitalised start-up bank in India’.
The RBI originally received 27 applications in July 2013, after which Tata Sons and Videocon Group withdrew, leaving 25 contenders in the fray. Nitin Kumar, banking & financials analyst, Quant Capital feels the company may now see a reduction in FII shareholding and its ROE (return on equity) may reduce in the days to come. “The fact that only two candidates have got the license and IDFC has been one of the chosen one, that should lead to more buying. However, on a longer-term basis, over the next 18 months we may see further reduction in Foreign Institutional Investors (FIIs) holdings in the stock,” he adds.
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