IDBI BANK HISTORY

• The Company was Incorporated on 1st July, at Mumbai. The Bank was established as a wholly owned subsidiary of the Reserve Bank of India on 1st July, under a special statute, viz., Industrial Development Bank of India Act.

• With effect from 1st April, the Bank introduced a scheme for rediscounting usance bills/promissory notes arising out of sale of indigenous machinery on deferred payment basis.

The Bank decided to supplement its refinance operations with a measure of risk-sharing with other institutions on a systematic basis and introduced a participation scheme for this purpose, with effect from 1st April, 1966.

MISSION• To ensure most cost effective power for sustained growth of India.• To provide clean and green power for secured future of countrymen.• To retain leadership position of the organisation in Hydro Power generation, while working

with • dedication and innovation in every project we undertake.• To maintain continuous pursuit for cost effectiveness, enhanced productivity for ensuring

financial health • of the organization, to take care of stakeholders’ aspirations continuously.• To be a technology driven, transparent organization, ensuring dignity and respect for its team

members.• To inculcate value system all cross the organization for ensuring trustworthy relationship with

its • constitutent associates & stakeholders.• To continuously upgrade & update knowledge & skill set of its human resources.• To be socially responsible through community development by leveraging resources and

knowledge base.• To achieve excellence in every activity we undertake.

VISION

• To be amongst most trusted power utility company of

• the country by providing environment friendly power on

• most cost effective basis, ensuring prosperity for its

• stakeholders and growth with human face.

COMPANY OVERVIEW• Date of Establishment1964Revenue4171.52 ( USD in Millions )Market Cap105846.6905275

( Rs. in Millions )Corporate AddressIdbi Tower,Wtc Complex,Cuffe ParadeMumbai-400005, Maharashtrawww.idbi.comManagement DetailsChairperson - R M Malla MD - R M MallaDirectors - A Sakthivel, Ajay Shankar, Analjit Singh, Arun Ramanathan, B P Singh, B S Bisht, BK Batra, G C Chaturvedi, H L Zutshi, Jitender Balakrishnan, K Narasimha Murthy, Lila Firoz Poonawalla, O V Bundellu, P S Shenoy, Pawan Agrawal , Pradeep Kumar Chaudhery, R M Malla, R P Singh, Rakesh Singh, S N Baheti, Sailendra Narain, Subhash Tuli, Yogesh Agarwal

• Business OperationBank - PublicBackgroundIndustrial Development Bank of India (IDBI Bank) is today one of India’s largest commercial Banks. For over 40 years, IDBI Bank has essayed a key nation-building role, first as the apex Development Financial Institution (DFI) (July 1, 1964 to September 30, 2004) in the realm of industry and thereafter as a full-service commercial Bank (October 1, 2004 onwards). As a DFI, the erstwhile IDBI st

• FinancialsTotal Income - Rs. 206844.697 Million ( year ending Mar 2011) Net Profit - Rs. 16503.194 Million ( year ending Mar 2011)Company SecretaryPawan AgrawalBankersNo Bankers Details in A.RAuditorsKhimji Kunverji & Co, Suresh Chandra & Associates

KEY EXECUTIVES

S.NO NAME DESIGNATION

1 RM malla chairman

2 Pawan Agrawal Company secretary

3 RM malla Managing director

4 Subhash tuli director

5 Pradeep kumar chowdhry Government nominee director

6 Pawan agrawal Compliance officer

COMPETITORS

• SBI• BANK OF BARODA• PNB• CANARA BANK• INDIAN BANK• ALLAHABAD BANK• ORIENTAL BANK• CORPORATION

PRODUCTPRODUCT NAME

YEAR MONTH SALES QUANTITY

SALES VALUE(RS MILLLION)

% OF STO

INTEREST/DISCOUNT ON ADVANCES BILLS

2011 03 0.00 137503.94

73.92

INCOME ON INVESTMENT

2011 03 0.00 48115.25 25.87

OTHERS 2011 03 0.00 212.42 0.11INTERST ON BALANCE WITH

- - - - -

RESERVE BANK OF INDAI AND OTHER

2011 03 0.00 176.62 0.09

• 1) WealthsuranceTM: Insured Wealth Plans to grow wealth under a protective cover

• .Wealthsurance offers you Insured Wealth Plans. They allow you to create, build and managewealth by giving several choices and great flexibility so that your plan meets your specific needs.You can decide how you wish to save so that it suits your savings habit. You can choose howyour money is invested so that you can grow wealth as per your investment preferences. What iseven better, Wealthsurance protects your wealth plans.

2 HomesuranceTM Protection Plan?• Homesurance Protection Plan* is a mortgage

reducing term assurance plan, which providesinsurance cover equal to the outstanding balance of your home loan. In the unfortunate event of death of the home loan borrower, the insurance cover plans.

• IDBI Fortis HomesuranceTM Plan?

• Homesurance is a mortgage reducing term plan which offers protection to your home from your home loan. The Plan provides a cover equal to the outstanding balance.

GEOGRAPHICAL AREA

• This accommodation placemark is situated in Thane, Maharashtra, India and its geographical coordinates are 19° 47' 59" North, 72° 45' 30" East.

• Original name (with diacritics) of the place is Boisar.

DEPOSIT POLICY

• One of the important functions of the Bank is to accept deposits from the

• public for the purpose of lending. In fact, depositors are the major stakeholders of

• the Banking System. The depositors and their interests form the key area of the

• regulatory framework for banking in India and this has been enshrined in the

• Banking Regulation Act, 1949.

• The Reserve Bank of India is empowered to issue• directives / advices on interest rates on deposits

and other aspects regarding• conduct of deposit accounts from time to time.

With liberalization in the financial• system and deregulation of interest rates, banks

are now free to formulate deposit• products within the broad guidelines issued by

RBI.

• This policy document on deposits outlines the guiding principles in respect• of formulation of various deposit products offered by the Bank and terms and• conditions governing the conduct of the account. The document recognizes

the• rights of depositors and aims at dissemination of information with regard to• various aspects of acceptance of deposits from the members of the public,

conduct• and operations of various deposits accounts, payment of interest on various

deposit• accounts, closure of deposit accounts, method of disposal of deposits of

deceased• depositors, etc., for the benefit of customers.

• It is expected that this document will• impart greater transparency in dealing with

the individual customers and create• awareness among customers of their rights.

The ultimate objective is that the• customer will get services they are rightfully

entitled to receive without demand.

IDBI Bank Reinforces Presence in the Swiss Franc Bond Market

• IDBI Bank is the first Indian bank to make a Swiss Franc Bond Issue during 2012. The Bank launched a Swiss Franc (CHF) denominated bond on March 16, 2012 for an amount of CHF 100 million (approximately Rs 620 crore) with a maturity of three and a half years.

• The issue received encouraging response and was oversubscribed. IDBI Bank decided to close the issue the same day with an issue size of CHF 110 million at an annual coupon of 3.125%. The documents for the issue were signed on April 10, 2012 and the proceeds of the issue are being received today.

• The issue is being made by IDBI Bank through its offshore branch at Dubai International Financial Centre (DIFC), Dubai. The main investors for the issue are Private Banks and High Networth Individuals. Deutsche Bank was the sole lead manager and book-runner for the issue.

SWOT ANALYSIS• STRENGTH•

Superior customer service vs. competitors.

• Products have required accreditations.

• High degree of customer satisfaction.

• Good place to work

• Lower response time with efficient and effective service.

• Dedicated workforce aiming at making a long-term career in the field.

• Large pool of technically skilled manpower with in depth knowledge and under standing of the market

• WEAKNESSE• Some gaps in range for certain sectors.

• Customer service staff need training.

• Processes and systems, etc

• Management cover insufficient.

• Sectoral growth is constrained by low unemployment level and companies staffs.

• Opportunities• Insurable population• : According to IRDA only 10% of the population is insured

whichrepresent around 30% of the insurable population. This suggests more than 300m people,with the potential to buy insurance, remain uninsured.

• International companies will help in building world class expertise in local market byintroducing the best global practice.

• Could extend to overseas broadly.• New specialist applications.

• Could seek better customer deals.

• THREATS• Big public sector insurance companies like Lif e

Insurance Corporation (L IC) of India, National Insurance Company Limited, Oriental Insurance Limited, New India AssuranceCompany Limited and United India Insurance Company Limited. People trust and go tothem more.

• Legislation could impact and great risk involved.

• Very high competition prevailing in the industry.

• Vulnerable to reactive attack by major competitors

• Lack of infrastructure in rural areas could constrains investment.

FUTURE OUTLOOK

NIMs to be under pressure for FY12E but will stabilize in FY13E .

Higher dependence on term deposits has urged cost of deposits to rise

more than yield on advances for Q3FY12, further the bank expects to

grow their advances book on the back of low yielding priority sector

lending for Q4FY12. As a result we expect NIMs to come under

pressure for FY12E.

• Moreover, we believe softening interest rates and CASA ratio

• improving to 24% in FY13E will benefit NIMs. We expect NIMs to

• decrease to 1.8% in FY12E but improve to 1.9% and 2.0% in FY13E

• and FY14E respectively.

Slippages to remain an apprehension

• Given the current economic scenario, We expect IDBI’s asset quality

• to witness stress in FY12E. We expect GNPA’s to increase to 2.6% in

• FY12E and 2.5% in FY13E from 1.7% reported in FY11.

VALUATION

• At CMP the stock is trading at a P/ABV of 0.9x, 0.8x for FY12E, FY13E

• and FY14E respectively. We have valued the bank at 0.9x on FY14E

• ABV of Rs. 151, yielding a potential upside of 29% and recommend

• “Buy” rating for a target of Rs. 136 (18 months). We believe IDBI’s

• underperformance vis-à-vis bank nifty has been overdone. A P/ABV

• of 0.9x is justifiable for a bank with 20+ CASA ratio, 10.5% ROAE • and 0.6% ROAA.

KEY SHARE DATA

• Face Value (Rs.) 10• Equity Capital (Rs. Mn.) 9,856• M. Cap (Rs. Mn.) 104,124• 52-wk High / Low (Rs.) 154 / 77• Avg. Daily Volume (qtrly) 124,712• BSE code 500116• NSE code IDBI• Reuters code IDBI• Bloomberg code IDBI

• Financials (Rs. Mn.) FY11 FY12E FY13E FY14E• NII 43,289 48,203 57,632 74,484• NIMs (%) 1.9 1.8 1.9 2.0• Op. Profit 41,578 43,810 50,990 64,591• PAT 16,503 15,967 21,783 31,532• PAT Gr (%) 60.0 (3.3) 36.4 44.8• EPS (Rs.) 16.7 16.2 22.1 32.0• BVPS (Rs.) 147.8 160.2 177.2 201.7• ABVPS (Rs.) 130.8 120.3 134.4 151.3

• Interest Income 58,492 47,123 24.1 58,123 0.6 186,165 155,312 19.9• Interest Expended 47,897 35,083 36.5 46,903 2.1 142,702 131,452 8.6• Net Interest Income 10,595 12,040 (12.0) 11,220 (5.6) 43,463 23,860 82.2• Non-Interest Income 4,318 4,472 (3.4) 4,791 (9.9) 22,217 22,858 (2.8)• Net Total Income 14,913 16,512 (9.7) 16,011 (6.9) 65,680 46,718 40.6• Operating Expenses 6,670 5,167 29.1 5,947 12.2 24,919 19,342 28.8• -Employee Expenses 2,941 1,658 77.4 2,657 10.7 11,068 8,220 34.7• -Other Operating Expenses 3,728 3,509 6.3 3,290 13.3 13,850 11,123 24.5• Operating Profit 8,243 11,345 (27.3) 10,065 (18.1) 40,761 27,375 48.9• Provisions 4,064 6,520 (37.7) 3,206 26.8 18,771 16,873 11.2• Pre tax Income 4,179 4,826 13.4 6,859 (39.1) 21,990 10,502 109.4• Tax 81 285 (71.6) 1,700 (95.2) 6,355 297 2,042.5• Post Tax Income 4,098 4,541 9.7 5,159 (20.6) 15,635 10,205 53.2• Extra Ordinary Items - - - - -• Reported Diluted EPS 4 5 15.4 5 (25.6) 17 14 23.6• Asset Quality• Gross NPA's 46,399 30,205 53.6 38,895 19.3 27,847 21,294 30.8• % Gross NPA's 2.9 2.2 72 bps 2.5 47 bps 1.8 1.5 23 bps• Net NPA's 30,579 16,095 90.0 24,429 25.2 16,779 14,063 19.3• % Net NPA's 2.0 1.2 76 bps 1.6 39 bps 1.1 1.0 4 bps

• Key Balance Sheet Items• Deposits 1,771,230 1,502,390 17.9

1,744,408 1.5 1,804,858 1,676,671 7.6

• Advances 1,562,170 1,344,910 16.2 1,559,171 0.2 1,570,981 1,382,019 13.7

• Investments 713,760 661,230 7.9 699,406 2.1 682,692 733,455 (6.9)

• Capital Adequacy (%)• CAR 13.5 14.1 -57 bps 13.3 19

bps 13.6 11.3 233 bps• Tier I 7.5 8.8 -130 bps 7.8 -23

bps 8.0 6.3 180 bps

KEY RATIOS REPORTED

• NIM 1.9 2.4 -53 bps 2.0 -11 bps 1.9 1.1 85 bps

• CASA 19.7 15.1 462 bps 19.2 48 bps 20.9 14.6 629 bps

• Credit / Deposit 88.2 89.5 -132 bps 89.4 -118 bps 87.0 82.4 462 bps

• Net Interest Income 43,289 48,203 57,632 74,484 I. Asset Quality (%)

• Non Interest Income 20,836 21,336 23,692 28,041 Gross NPAs / Gross Advances 1.7 2.6 2.5 2.3

• Net Total Income 64,125 69,540 81,324 102,525 Net NPAs / Net Advances 1.1 2.2 2.0 2.0

• Non Interest Expenses 22,547 25,730 30,334 37,934 Gross NPAs / Total Assets 1.1 1.7 1.6 1.5

• Other Provisions 17,726 20,737 19,512 19,024 Net NPAs / Total Assets 0.7 1.4 1.3 1.2

• Pre-tax Income 23,853 23,073 31,478 45,567 Credit Costs 1.8 2.8 2.2 1.9

• Tax Provisions 7,349 7,107 9,695 14,035• Post-tax Income 16,503 15,967 21,783 31,532 I

• Net Interest Income 1.8 1.8 1.9 2.0 P / B (x) 0.7 0.7 0.6 0.5

• Non Interest Income 0.9 0.8 0.8 0.8 P / ABV (x) 0.8 0.9 0.8 0.7

• Net Total Income 2.6 2.6 2.6 2.8 P / E (x) 6.3 6.5 4.8 3.3

• Non Interest Expenses (0.9) (1.0) (1.0) (1.0)• Other Provisions (0.7) (0.8) (0.6) (0.5) VI. Capital

Sustenance (%)• Tax Provisions (0.3) (0.3) (0.3) (0.4) CRAR 13.6 12.7

11.6 10.4• ROAA 0.7 0.6 0.7 0.9 Tier I 8.0 7.7 7.3

6.8• Leverage (x) 19.7 17.8 18.7 19.7• ROAE 13.3 10.5 13.1 16.9