IDFC First Bank share price declines more than 3% on bulk deal news reports
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IDFC First Bank share prices decline more than 3% on Thursday during the intraday trades on a day when benchmark indices gained more than 1%. The Nifty Banking index was up 0.8% while the Nifty Private Bank index was up 0.59%. The Banking peers as ICICI Bank, HDFC Bank, IndusInd Bank , Kotak Bank , RBL Bank , gained up to 1.5%. Only Axis Bank was marginally down.
The decline in IDFC First Bank share price however is attributed to the bulk deal news reports.
According to The Economic Times , private equity giant Warburg Pincus was expected to divest IDFC First Bank on Thursday by selling its whole 2.3% share in the lender through block agreements. Quoting news sources The Economic Times had also said that an unit of Warburg Pincus, Cloverdell Investment, has set a floor price of ?75 per share and is expected to sell 15.9 crore shares. According to reports, it hopes to profit from the sale for ?1,191.40 crore.
As per the BSE Cloverdell Investment Limited is a foreign body corporate which had a strategic investment in erstwhile Capital First Limited, which subsequently got merged with IDFC Bank Limited (now known as IDFC FIRST Bank Limited) in December 2018. Accordingly, Cloverdell Investment Limited has been categorized as Foreign Direct Investment.
Notably this is not the first time Warburg Pincus has reduced its ownership of IDFC First Bank and news reports suggest that in December, the company sold a 1.3% stake for ?790 crore in an open market deal.
The Warburg Pincus affiliate also had sold a 4.2% interest in IDFC First Bank in September of last year for ?2,480.34 crore. As of the end of the first quarter of FY24, Cloverdell Investment was reported to own a 7.12 percent investment in the private lender.
With the sharp decline in past few days IDFC first Share price however has slipped below the support zone at ?78-79 on technical charts. On 28th February Vaishali Parikh at Prabhudas Lilladher had given a buy call for a target price of ?95 , however with a stop loss at ?78. With bulk deal news reports, the stock has slipped below the support zone and hit a stop loss.(Mint)