Stock Market Reaction to Positive Business Updates
The shares of IDFC First Bank and Poonawalla Fincorp rallied sharply on April 3, 2025, defying the broader market trend after the two financial institutions reported robust business updates for the fourth quarter of FY25. IDFC First Bank witnessed a nearly 6% surge, reaching ₹60.40 per share, while Poonawalla Fincorp gained over 4% to ₹362.35, marking its highest level of the year.
Investors reacted positively to strong loan growth, higher deposit accumulation, and prudent financial management demonstrated by both companies. These gains come at a time when the broader market is facing volatility due to rising global economic concerns and trade uncertainties. The financial sector’s resilience, as reflected in these updates, has provided a boost to investor confidence, particularly in the banking and non-banking financial company (NBFC) segments.
Highlights from the Market Response:
IDFC First Bank stock surged nearly 6% to ₹60.40, reaching a one-month high.
Poonawalla Fincorp climbed over 4% to ₹362.35, its highest level in 2025.
Investor sentiment improved due to strong business performance and liquidity.
Financial stocks showed resilience amid market volatility.
IDFC First Bank: Robust Growth in Loans and Deposits
IDFC First Bank delivered an impressive growth trajectory, reporting a 23% year-on-year (YoY) increase in total business, which now stands at ₹4.84 lakh crore as of March 31, 2025. The bank’s expansion was primarily driven by a 20% rise in loans and advances, coupled with a 25% surge in customer deposits.
The bank’s loans and advances expanded to ₹2.42 lakh crore, reflecting strong credit demand across its retail and corporate segments. Meanwhile, customer deposits surged to ₹2.43 lakh crore, highlighting growing consumer trust and an improving retail deposit base. The current account and savings account (CASA) deposits also experienced a 25% rise, reaching ₹1.18 lakh crore. However, the CASA ratio slightly dipped to 46.9%, down from 47.2% recorded a year earlier.
Credit-Deposit Ratio and Financial Prudence
A key highlight of IDFC First Bank’s update was the steady decline in its credit-deposit ratio, which now stands at 93.8%, compared to previous levels. This demonstrates improving financial discipline, as the bank continues to reduce reliance on external borrowings and focus on deposit-driven growth.
Since the merger of IDFC Bank and Capital First in 2018, the bank has progressively lowered its credit-deposit ratio by retiring legacy debt and expanding retail deposits. The incremental credit-deposit ratio for the trailing 12 months (March 2024 – March 2025) stood at 75.7%, indicating a well-managed liquidity position and sustainable growth strategy.
Financial Highlights of IDFC First Bank:
Total business grew by 23% to ₹4.84 lakh crore.
Loans and advances surged 20% YoY to ₹2.42 lakh crore.
Customer deposits rose 25% YoY to ₹2.43 lakh crore.
CASA deposits increased 25% YoY to ₹1.18 lakh crore.
CASA ratio slightly declined to 46.9% from 47.2% a year ago.
Credit-deposit ratio dropped to 93.8%, reflecting improved financial management.
Poonawalla Fincorp: Exceptional Growth in Assets Under Management (AUM)
Poonawalla Fincorp recorded remarkable growth in its financial metrics, with its Assets Under Management (AUM) expanding by 42% YoY to ₹35,550 crore as of March 31, 2025. This substantial rise underscores the NBFC’s strong lending momentum across diverse product categories, including retail and MSME financing.
Liquidity Strength and Risk Management
In its latest financial update, Poonawalla Fincorp highlighted its strong liquidity position, with nearly ₹4,670 crore in available reserves. This ample liquidity provides the company with financial flexibility to support future loan growth and manage market uncertainties effectively.
The company also reaffirmed its commitment to a risk-first approach, emphasizing robust risk management frameworks and diversified asset allocation. By maintaining a disciplined approach to credit underwriting and portfolio diversification, Poonawalla Fincorp aims to sustain its growth momentum while mitigating potential market risks.
Company Statement on Growth Strategy
In its exchange filing, Poonawalla Fincorp reiterated its commitment to long-term sustainable growth, stating:
“The company stands by its risk-first approach, robust risk management systems, and a diversified asset base. As we continue to scale, our focus and commitment remain on business expansion in line with building a long-term sustainable profitable model.”
Financial Highlights of Poonawalla Fincorp:
AUM surged 42% YoY to ₹35,550 crore.
Liquidity reserves remained strong at ₹4,670 crore.
Continued focus on risk management and business expansion.
Investor Sentiment
The financial sector has remained a key driver of market sentiment, especially as global trade concerns and economic slowdown fears continue to dominate investor discussions. The strong performance of IDFC First Bank and Poonawalla Fincorp indicates resilience within India’s banking and NBFC sectors, with sustained loan growth, deposit accumulation, and stable liquidity positions.
Market analysts believe that IDFC First Bank’s improving credit-deposit ratio and retail-focused growth strategy will further strengthen its balance sheet, making it a preferred pick among investors. Similarly, Poonawalla Fincorp’s robust AUM expansion and ample liquidity signal strong business fundamentals, positioning the NBFC for continued growth in the upcoming quarters.
Highlights from the Market Outlook:
IDFC First Bank’s disciplined credit expansion and strong deposit growth bolster investor confidence.
Poonawalla Fincorp’s liquidity strength and 42% AUM growth highlight its robust financial health.
Both firms’ financial stability makes them attractive options for long-term investors.
Banking and NBFC sectors remain resilient despite macroeconomic uncertainties.
