Indian Bank gains 3% on heavy volume; stock jumps 6% so far in August

Shares of Indian Bank gained 3 per cent to quote at Rs 64.10 per share on the BSE on Monday on the back of heavy volumes. A spurt in volumes was witness at around 9:45 am when the stock was trading at Rs 62 per share. Since then, a combined 1.17 million shares have changed hands on the counter on the NSE and BSE till the time of writing of this report.

According to reports, the lender has decided to rope in a minority partner for Ind Bank Housing to revive the now defunct housing finance subsidiary. The bank is also planning to infuse capital in the company where it holds a 51 per cent stake.

"We are looking at a strategic partner to bring in management competencies as well as capital. We would also likely infuse capital, subject to Reserve Bank of India's permission, since we believe there would be value in it," the bank's chief executive Padmaja Chunduru told The Economic Times.

On Friday, the bank reported a marginal 1 per cent rise in its standalone net profit at Rs 369.26 crore in the first quarter ended June 2020. Its net profit stood at Rs 365.37 crore in the same period a year ago. Sequentially, the lender had posted a net loss of Rs 217.73 crore in preceding quarter ended March 2020.

However, total income of the bank almost doubled to Rs 11,446.71 crore during the April-June period of 2020-21 from Rs 5,832.12 crore in the year-ago same period, Indian Bank said in a regulatory filing.

With regard to June 2019 quarter and sequential January-March 2020 period numbers, the bank said the figures are related to standalone Indian Bank financials for pre-amalgamation period, hence not comparable with post amalgamation financials for the quarter ended June 30, 2020. Allahabad Bank was merged into Indian Bank with effect from April 1, 2020.

Asset quality of the bank witnessed worsening with the gross non-performing assets (NPAs) rising to 10.90 per cent of the gross advances as on June 30, 2020 as against 7.33 per cent by the year-ago same period. Net NPAs or bad loans on the other hand came down to 3.76 per cent from 3.84 per cent. Bank's provisioning for bad loans and contingencies for the June quarter of FY'21 rose to Rs 2,139.12 crore from Rs 794.82 crore parked aside for the same quarter of FY'20.

At 10:48 am, the stock was quoting at Rs 63.5 per share, up 2 per cent on the BSE, as against a 100 point, or 0.27 per cent, rise in the benchmark S&P BSE Sensex. So far in the month of August, the stock price has rallied 6.5 per cent on the BSE, as against 0.07 per cent gain in the benchmark Sensex, BSE data shows.