Turnaround: liability franchise ahead of profits
IDFC First Bank is one of India’s fast-growing private banks, building its UI, UX, and tech stack like a fintech. The Bank is a universal Bank offering complete range of services, including Retail, MSME, Rural, Startups, Corporate Banking, Cash Management, Credit Cards, Wealth Management, Deposits, Government Banking, Working Capital, Trade Finance, and Treasury solutions.
IDFC First Bank Limited provides various banking and financial services in India. It operates through the Treasury, Corporate and Wholesale Banking, Retail Banking, and Other Banking Business segments. The company offers treasury and forex solutions, including correspondent banking, FX, cross-border swift, government bonds and strips, liberalized remittance scheme, and external commercial borrowing solutions, as well as treasury solutions comprising forwards, options, and swaps. It also provides retail lending solutions, such as home loans, vehicle loans, consumer loans, education loans, personal loans, used car loans, gold loans, rural finance, and tractor finance; SME lending solutions that consist of loan against property, business banking, working capital loans, commercial vehicle loans, micro enterprise loans, trade advance, and startup banking; CASA and fixed deposits, which include current accounts, savings accounts, fixed deposits, nostro/vostro accounts, overdrafts, corporate salary accounts, accounts for ONDC, and escrow account; and NRI Banking that comprises NRE accounts, NRO accounts, seafarer accounts, FCNR deposits, and NRE/NRO deposits. In addition, the company offers wealth management and distribution solutions, including distribution of life insurance, general insurance, credit shield, health insurance, mutual funds, and AIFs; credit cards; and FASTag, such as tag issuer, toll acquirer, toll, parking, and fuel solutions. Further, it provides trade finance solutions that consist of letters of credit and discounting, bank guarantee, buyer's credit/SBLC, parking credit in foreign currency and INR, remittances, and pre and post shipment finance; supply chain financing; and transaction banking and CMS solutions. The company was formerly known as IDFC Bank Limited and changed its name to IDFC First Bank Limited in January 2019. IDFC First Bank Limited was founded in 1997 and is based in Mumbai, India.
Key people: Mr. Vembu Vaidyanathan AMP (HBS), MBA (MD, CEO & Director) · Mr. Pradeep Natarajan (Head of Retail Banking & Executive Director) · Mr. Sudhanshu Jain (CFO & Head of Corporate Centre) · Mr. Tyagarajan Iyer (Head of Operations & Technology) · Mr. Saptarshi Bapari (Head of Investor Relations) · Mr. Satish Ashok Gaikwad (General Counsel & Company Secretary)
IDFC First Bank major competitors are Indusind Bank, Yes Bank, AU Small Fin. Bank, Federal Bank, RBL Bank, Karur Vysya Bank, Bandhan Bank. Market Cap of IDFC First Bank is ₹73,935 Crs. While the median market cap of its peers are ₹72,790 Crs.
IDFC First Bank seems to be financially stable compared to its competitors.The probability of it going bankrupt or facing a financial crunch seem to be lower than its immediate competitors.
Yahoo profile 23 Sept 2026 · Tijori 23 Sept 2026
Latest reported mix as compiled by Tijori from company disclosures; percentages of revenue.
As the company reports them. They can differ from the ratio table on the Financials tab, which uses Tijori's own definitions (for example NIM on average total assets rather than on interest-earning assets); the Cross-check panel there lines both up.
Private-sector universal bank formed from the 2018 merger of IDFC Bank and Capital First, now a retail/MSME-focused lender with loans of Rs 3.05 lakh crore (+20.6% YoY) and customer deposits of ~Rs 3 lakh crore (Jun-2026). It has one of the highest CASA ratios among private banks (50.8%) and a 5.9-6.0% NIM, but a 70%+ cost-to-income ratio and the FY25-26 microfinance stress kept FY26 ROA at ~0.4%. No identifiable promoter (promoter holding 0%); Warburg Pincus (~9.5%) and ADIA (~5.1%) became anchor investors via a Rs 7,500 cr CCPS issue in 2025.
1.54x trailing book (BV Rs 56.2) and 32x TTM PE (screener, 7-Sep-2026); Axis Direct values it at 1.3x FY28E ABV. Historical 5y average not sourced; 52-week high Rs 87 (Feb-2026). EV/EBITDA n.m.; dividend yield 0.3%.
| AU Small Finance Bank | AU trades at a much richer ~3x+ book (screener data on AU's FY26 PAT was inconsistent and is not relied on) as a universal-bank-licence candidate; IDFC First already has the universal licence, a 50.8% CASA ratio (vs AU's ~30%) and is at a lower 1.5x book with ROA doubling in FY27. |
| Federal Bank | Federal (18x PE, 2.1x P/B, ROE 12%, Q1FY27 PAT -18% YoY per screener) is a steadier but lower-growth franchise (NIM ~3%); IDFC First offers 20%+ loan growth, 5.9% NIM and far larger ROA upside from 0.4% to 1.7-1.8%. |
| IndusInd Bank | IndusInd (1.2x book, FY26 PAT Rs 889 cr, ROE 1.4%, Q1FY27 PAT -15%) is cheaper but is still repairing its derivatives/MFI accounting lapses and leadership; IDFC First has cleaner governance, rising ROA and Warburg/ADIA backing. |
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Banking — 21.1%: the largest exposure, chosen bank by bank
Banks are the cheapest way to own an economy growing 8–9% in nominal terms, and today they are cheap for a reason that has nothing to do with their economics. Every one of the four cycles that drive bank earnings is turning in their favour: deposits are growing 15.4% (the fastest in a decade) so the funding squeeze that capped growth in FY25–26 is easing; system credit is growing 18.3% and corporate borrowing is migrating from a shrinking bond market (issuance −18%) back onto bank balance sheets; margins troughed in the June 2026 quarter after 125 bp of repo cuts and are now rising as deposits reprice; and asset quality is the best in twenty years (large private-bank net NPAs 0.3–0.5%, SBI 0.38%). Yet the Bank Nifty trades below its own long-run average. The reason is mechanical: foreign investors have sold ₹1.8 lakh crore of Indian equity in FY26 and six of their ten largest holdings are banks. They can only sell what they own. Our own work — a capital-adjusted residual-income model of the four large private banks plus SBI, built from FY17 — says the four large private banks earn 14.5–17.5% on normalised capital against a 12.25–13% cost of equity and will compound book at 12–16% a year. Over ten-year horizons EPS growth and share-price growth converge; the arithmetic is on our side even if the timing of the narrative turn is not. The important sales point is that our alpha in financials has come from selection, not the index: SBI in 2017 when retail delinquencies were better than perceived, ICICI as a top pick from 2018, Axis through its credit-cost trough (up 40–50% for us). Roughly 40% of the bank index is HDFC Bank and Kotak and we deliberately did not hug it at 4–5x book.
Kotak Mahindra Bank is the obvious omission. Our model rates it REDUCE: a 12% ROE bank at 2.0x core book, priced for a 17% ROE it does not earn, with CASA sliding toward 40% and a CEO succession still ahead. The argument the house has used for years — a 16–17% ROE bank cannot compound above that without dilution, so 4–5x book is unsustainable — applies with more force to a 12% one. IndusInd is a governance rebuild we do not need to underwrite; Federal Bank and AU Small Finance are good franchises but neither has IDFC First's deposit engine or its operating-leverage runway at a comparable price. Among public-sector banks, Bank of Baroda and Canara are cheaper on paper but have weaker CASA, thinner capital and none of SBI's subsidiary optionality; SBI's premium (1.25x vs 0.9–1.0x) is the price of a franchise that survived the AQR and emerged with the best retail book in the system.
| Bank Advances - Market Share | 1.38 % | as of Jun 26 |
| Bank Deposits - Market Share | 1.18 % | as of Jun 26 |
| Credit Card Transactions - Market Share | 2.38 % | as of Jul 26 |
| Debit Card Transactions - Market Share | 0.82 % | as of Jul 26 |
| Internet Banking - Market Share | 1.34 % | as of Jul 26 |
| Mobile Banking Transactions - Market Share | 2.19 % | as of Jul 26 |
| Net Interest Income(NII) - Market Share | 2.25 % | as of Jun 26 |