Banking licence nod: IDFC shares fall over 2 per cent on profit-booking

Shares of infrastructure financing firm IDFC pared early gains, falling over 2 per cent on profit-booking in-line with a weak stock market, even as the Reserve Bank of India (RBI) granted in-principle approval to the company to set up a new bank.

RBI had on Wednesday granted an in-principle approval to IDFC and Bandhan Financial Services to foray into the banking business.

Until a regular licence is issued, the applicants would be barred from doing banking business.

After surging 8.71 per cent to Rs 139.15 in intra-day trade, IDFC's stock surrendered the gains and ended at Rs 124.95, down 2.38 per cent at the BSE. On the NSE, the company's stock settled lower by 2.43 per cent at Rs 124.70.

In the broader market, the BSE Sensex ended at 22,509.07, down 42.42 points.

In a filing to the Bombay Stock Exchange (BSE) on Thursday, IDFC said approval will be valid for a period of 18 months, during which the applicants have to comply with the requirements under the guidelines and fulfil other conditions as may be stipulated by the RBI.

On being satisfied that the applicants have complied with the requisite conditions laid down by the RBI as part of in-principle approval, they would be considered for grant of a licence for commencement of banking business, it added.