IDFC First Bank shares rally up to 4%. What's cooking?

Shares of private lender IDFC First Bank rallied up to 4% on Monday on talks to acquire Vaya Finserve's assets. The stock has rallied over 70% in the last 6 months and hit a day's high at Rs 55.05 today."We would like to clarify that the bank is in discussion with Vaya Finserve for a possible buyout of their loan receivables in accordance with Reserve Bank of India Master Direction on Transfer of Loan Exposures Directions, 2021, to meet the Priority Sector Lending (“PSL”) requirements of the Bank," said the lender in a letter to stock exchanges.
The bank was asked to clarify a news report that said it might acquire Vaya MFI's assets for about 1,000 crore.

"We would like to clarify that neither the envisaged transaction nor the contents of the news item warrant any disclosure in terms of Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR”). The bank has and will continue to make disclosures in compliance with our obligations under SEBI LODR," the bank said in the regulatory filing.


The consensus recommendation from 12 analysts for IDFC First Bank is hold, shows Trendlyne data with 5 analysts calling it a buy and 3 sell.

The bank's average share price target of Rs 54.7 is above the current price, with a limited upside potential of 3.3%.

In Q2, the bank reported a nearly 50 per cent jump in its standalone net profit at Rs 151.74 crore in the quarter ended September 2021. The bank posted a profit of Rs 101.41 crore in the same quarter a year ago.

Bank's provisioning for bad loans and contingencies raised substantially for the September quarter at Rs 474.95 crore as bad loans moved up.

The lender’s net Interest Income (NII) grew by 27% YOY to Rs 2,272 crore in Q2 FY22, up from Rs 1,784 crore in Q2 FY21.

"What is generally considered as failure deepens your experience of life far more than what you consider as success." - Sadhguru