1. At a Glance
Once the sad boy of Indian banking with NPAs that could fill a black hole, IDBI Bank is now slowly turning into a comeback kid. Backed by LIC and the government, this bank’s resurrection arc deserves a docuseries.
2. Introduction with Hook
If Indian banks were Bollywood characters, HDFC is the hero, SBI is the strict father, and IDBI was… the tragic backbencher who failed every exam until one day—got a haircut, hit the gym, and passed the RBI’s PCA test.
- Market Cap: ₹1.07 lakh crore
- Price: ₹99.7
- Dividend Yield: 2.11%
Now with improving profits, lower NPAs, and some real growth on the books, is this bank finally going from IDBI = I Don’t Bank Intelligently to IDBI = I Definitely Bank Intelligently?
3. Business Model (WTF Do They Even Do?)
IDBI Bank offers core banking services: retail, corporate banking, and treasury operations.
Business Segment Split (Q2 FY25):
- Retail Banking: 55%
- Corporate/Wholesale Banking: 17%
- Treasury: 27%
- Others: 1%
They’re shifting focus to low-risk retail lending—which is code for: no more blowing up ₹500 crore on one random power company in 2008.
4. Financials Overview
| Metric | FY23 | FY24 | FY25 (Est) |
|---|---|---|---|
| Revenue | ₹20,592 Cr | ₹26,446 Cr | ₹28,917 Cr |
| Net Profit | ₹3,728 Cr | ₹5,814 Cr | ₹7,656 Cr |
| Net Interest Margin | ~3.5% | ~3.6% | ~3.7% |
| EPS | ₹3.45 | ₹5.38 | ₹7.10 |
Growth Story:
- Revenue CAGR (3 yrs): 16%
- Net Profit CAGR (3 yrs): 44%
- P/E: 14x
- Book Value: ₹57.3
Basically, the engine’s running and it’s finally moving forward… without a flat tire.
5. Valuation
Let’s talk math (briefly, promise):
- Fair Value Range: ₹110 – ₹135
Based on:- P/BV of ~2.0x (peer avg: 2.3x)
- EPS forward estimate: ₹7.5 with 14–16x P/E
- Assuming stable ROE near 14% and improving asset quality
It’s trading at 1.74x book—still discounted compared to HDFC (3x), ICICI (3.2x). That’s PSU baggage for you.
6. What’s Cooking – News, Triggers, Drama
- Privatization Buzz:
LIC + GoI still hold ~94.72%. Strategic sale is on the menu (still stuck in RBI/LIC buffet line). - Q1 FY26 Business Update:
- Deposits ↑ 7% YoY
- Advances ↑ 9% YoY
- Total Business ↑ 8%
- Strike Drama:
Major bank union strike on July 9, 2025 (they’re mad… again).
If this privatization actually goes through, the stock might just pull a “Yes Bank without the trauma”.
7. Balance Sheet
| Particulars | FY23 | FY24 | FY25 |
|---|---|---|---|
| Deposits | ₹2.55L Cr | ₹2.77L Cr | ₹3.10L Cr |
| Borrowings | ₹12.6K Cr | ₹17.1K Cr | ₹19.9K Cr |
| Reserves | ₹35.5K Cr | ₹40.3K Cr | ₹50.8K Cr |
| Total Liabilities | ₹3.31L Cr | ₹3.64L Cr | ₹4.13L Cr |
Key Highlights:
- CASA improving
- Debt under control
- Equity dilution stabilised
8. Cash Flow – Sab Number Game Hai
| Cash Flow (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | -2,701 | -1,252 | +25,796 |
| Investing | -283 | -217 | -338 |
| Financing | -3,569 | -1,768 | -6,990 |
| Net Cash Flow | -6,554 | -3,237 | +18,467 |
Yes, it’s finally positive. For a bank that was burning cash faster than a startup founder at a bar, this is a good sign.
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 8% | 12% | 14% |
| ROA | 0.8% | 1.2% | 1.4% |
| Net NPA | ~1.0% | ~0.9% | ~0.8% (est) |
| Capital Adequacy | ~17.5% | ~18% | ~18.2% |
It’s giving “finally healthy after ICU” vibes. Not exactly a fitness model, but it’s running marathons again.
10. P&L Breakdown – Show Me the Money
| FY | Revenue | Net Profit | NIM | EPS |
|---|---|---|---|---|
| FY23 | ₹20,592 Cr | ₹3,728 Cr | 3.4% | ₹3.45 |
| FY24 | ₹26,446 Cr | ₹5,814 Cr | 3.6% | ₹5.38 |
| FY25 | ₹28,917 Cr | ₹7,656 Cr | 3.7% | ₹7.10 |
Double-digit EPS growth. Margin expansion. Profits finally looking… like actual profits.
11. Peer Comparison
| Bank | Price | P/E | ROE | NIM | NP FY25 | CASA |
|---|---|---|---|---|---|---|
| HDFC | ₹1,986 | 21.5x | 14.5% | 4.1% | ₹70K Cr+ | 44% |
| ICICI | ₹1,418 | 19.8x | 17.9% | 4.3% | ₹51K Cr | 44% |
| AXIS | ₹1,159 | 12.9x | 16.3% | 4% | ₹27K Cr | 45% |
| IDBI | ₹99.7 | 14x | 13.6% | 3.7% | ₹7.6K Cr | ~46% |
It’s like comparing an old Maruti 800 that’s been upgraded to CNG with a fleet of Audis. But hey—it still runs, and it’s cheap.
12. Miscellaneous – Shareholding, Promoters
- Promoters (LIC + GoI): 94.72%
- FIIs: 0.46% (tiptoeing in)
- Public: 4.63%
- Dividend Payout: ~30%
- Retail Shareholders: Over 7.2 lakh
Once the promoter stake falls below 75% post-sale, expect wild price action. Right now it’s PSU-locked.
13. EduInvesting Verdict™
IDBI Bank has gone from the biggest NPA piñata in Indian banking to a quietly recovering underdog. Still PSU? Yes. Still low ROE compared to private peers? Yes. But also — a cleaner book, decent earnings, and potential privatization trigger makes it worth watching.
Not a rocketship, but if this turnaround sustains—and if the government finally lets it go—this could be one of those “lol I should’ve bought it at ₹99” stories.
Metadata
– Written by EduInvesting Research | 18 July 2025
– Tags: IDBI Bank, PSU Banking, LIC, Banking Turnaround, Privatisation Play, NPA Recovery, Indian Banks Analysis
