BofA Downgrades IDFC First Bank, Cuts Target 21% After ₹590 Crore Fraud Fallout
Shares of IDFC First Bank remain under pressure after Bank of America downgraded the stock to Neutral and slashed its target price by 21% to ₹75. The move follows the ₹590 crore fraud involving a Haryana government account, allegedly orchestrated by a former branch manager. While the bank has stated that the financial impact would be negligible and that the state government has been repaid with interest, BofA believes a re-rating may now be delayed. The brokerage has also cut its FY27 EPS estimates by 13%, citing near-term uncertainty. Management maintains that recovery efforts are underway and regulators have indicated there is no systemic risk. However, with investigations ongoing and sentiment fragile, the street appears cautious despite the bank’s stronger-than-expected Q3 performance.
Shares of IDFC First Bank remain under pressure after Bank of America downgraded the stock to Neutral and slashed its target price by 21% to ₹75. The move follows the ₹590 crore fraud involving a Haryana government account, allegedly orchestrated by a former branch manager. While the bank has stated that the financial impact would be negligible and that the state government has been repaid with interest, BofA believes a re-rating may now be delayed. The brokerage has also cut its FY27 EPS estimates by 13%, citing near-term uncertainty. Management maintains that recovery efforts are underway and regulators have indicated there is no systemic risk. However, with investigations ongoing and sentiment fragile, the street appears cautious despite the bank’s stronger-than-expected Q3 performance.
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