The IDFC First Bank share price took a severe hit on Monday, plunging a staggering 16%. This dramatic fall followed the bank’s disclosure of a major fraud case. The incident, detected at its Chandigarh branch, involved a massive sum of Rs 590 crore.
Investor confidence was immediately shaken by this news. The fraud is linked to accounts associated with the Haryana government. This connection added a layer of complexity and concern for the market.
The sharp decline reflected a clear weakening of investor resolve. Money flowed out of the stock as the news spread. The bank’s valuation suffered a significant blow in a single trading session.
Tuesday brought a slight sense of calm, however. The IDFC First Bank share price showed signs of steadying after the previous day’s crash. The freefall had paused, though the stock remained under pressure.
Intra-day trading on Tuesday still saw volatility. The scrip fell another 2.1% to hit a day’s low of Rs 68.56 on the BSE. This indicated that selling pressure had not completely abated.
The bank provided more details on the financial discrepancy. The total fraud amount stands at Rs 590 crore. Of this, Rs 490 crore has already been identified through reconciliation processes.
A further Rs 100 crore was estimated based on preliminary findings. This suggests the full scope of the issue was still being assessed. The disclosure prompted immediate repercussions beyond the stock market.
The Haryana government acted swiftly in response. It has de-empanelled IDFC First Bank from accepting fresh government deposits. AU Small Finance Bank was also de-empanelled in connection with the case.
This administrative action adds operational risk for the bank. Losing government business can impact future revenue streams. It is a direct consequence of the fraud discovery.
Brokerages reacted to the event by revising their outlooks. Several firms have cut their target prices for IDFC First Bank shares. This analyst sentiment continues to weigh on the stock’s recovery prospects.
The steadying on Tuesday is therefore a relative term. It simply means the precipitous drop has halted for now. The road to regaining full investor trust will be long.
The case highlights critical internal control challenges. A fraud of this magnitude at a single branch raises serious questions. Risk management protocols will undoubtedly face intense scrutiny.
For now, the market is watching and waiting. The IDFC First Bank share price movement will be a key indicator. Further developments from the investigation will drive sentiment.
The story is far from over. Regulatory reviews and internal audits are likely underway. The bank’s next steps in addressing the fallout will be crucial.