IDFC First Bank shares: ICICI Sec cuts target by 18% but sees fraud impact manageable
IDFC First Bank: While the near-term financial hit seems manageable, the incident necessitates a comprehensive review of internal control to mitigate vulnerabilities, the brokerage said.
- Feb 24, 2026,
- Updated Feb 24, 2026 3:05 PM IST
ICICI Securities on Tuesday cut its target price on IDFC First Bank Ltd by 18 per cent to Rs 80 from Rs 97 earlier while downgrading the stock to 'Add', as it believes the suspected deposits fraud hit appears manageable but is likely to weigh on investor sentiment.
The brokerage has cut its FY26 profit estmate by 16 per cent, assuming the entire hit is routed through profit & loss (P&L), but noted that the bank has outstanding contingent provisions of Rs 165 crore.
While the near-term financial hit seems manageable, the incident necessitates a comprehensive review of internal control to mitigate vulnerabilities, it said. The brokerage said it would closely monitor the outcomes of the forensic audit and the actions, if any, of other states /central government and other high-value depositors.
The management indicated a possible plan of recourse, including employee dishonesty insurance (Rs 35 crore), recovery by tracing money trail, liability of other entities involved and possible legal action. It has appointed KPMG as the forensic auditor and the outcome is expected in 4-5 weeks. The bank has suspended four officials.
"We reckon that Rs 590 crore translates to 1.3 per cent of current net worth (NW) and 19bps of RWA," the domestic brokerage said.
As per the bank, the issue is confined to a specific group of government-linked accounts of the Haryana government operated through one specific branch and does not extend to other customers.
IDFC Bank has been de-empaneled by the Haryana state for government business. Total deposits of the ICICI Securities noted that Haryana state and all other states and central government stood at 0.5 per cent (post Rs 200 crore outflow) or 8-10 per cent of total deposits.
"As per the bank, there is no adverse intimation from other state governments in the last few days. While the hit on net worth (1.3 per cent; 19 bps of RWA) seems manageable, the incident points out the potential discrepancies in internal control and could cloud the prospects of government business (float and fee), in our view," it said.
ICICI Securities on Tuesday cut its target price on IDFC First Bank Ltd by 18 per cent to Rs 80 from Rs 97 earlier while downgrading the stock to 'Add', as it believes the suspected deposits fraud hit appears manageable but is likely to weigh on investor sentiment.
The brokerage has cut its FY26 profit estmate by 16 per cent, assuming the entire hit is routed through profit & loss (P&L), but noted that the bank has outstanding contingent provisions of Rs 165 crore.
While the near-term financial hit seems manageable, the incident necessitates a comprehensive review of internal control to mitigate vulnerabilities, it said. The brokerage said it would closely monitor the outcomes of the forensic audit and the actions, if any, of other states /central government and other high-value depositors.
The management indicated a possible plan of recourse, including employee dishonesty insurance (Rs 35 crore), recovery by tracing money trail, liability of other entities involved and possible legal action. It has appointed KPMG as the forensic auditor and the outcome is expected in 4-5 weeks. The bank has suspended four officials.
"We reckon that Rs 590 crore translates to 1.3 per cent of current net worth (NW) and 19bps of RWA," the domestic brokerage said.
As per the bank, the issue is confined to a specific group of government-linked accounts of the Haryana government operated through one specific branch and does not extend to other customers.
IDFC Bank has been de-empaneled by the Haryana state for government business. Total deposits of the ICICI Securities noted that Haryana state and all other states and central government stood at 0.5 per cent (post Rs 200 crore outflow) or 8-10 per cent of total deposits.
"As per the bank, there is no adverse intimation from other state governments in the last few days. While the hit on net worth (1.3 per cent; 19 bps of RWA) seems manageable, the incident points out the potential discrepancies in internal control and could cloud the prospects of government business (float and fee), in our view," it said.