IDFC First Bank Share Crashes 20% After ₹590 Crore Fraud — Why the Stock Is Falling and Whether Investors Should Buy, Sell, or Hold

What Happened in the Latest IDFC Bank News?

The latest IDFC First Bank news has triggered a sharp reaction in the markets. The IDFC First Bank share price crashed nearly 20% on Monday, February 23, after the bank disclosed a ₹590 crore fraud at its Chandigarh branch.

The IDFC First Bank share price today opened at ₹75.21 compared to the previous close of ₹83.56 and fell to an intraday low of ₹66.85. The steep decline has led many investors to search for answers about why the IDFC First Bank share is falling and whether this is a temporary correction or a deeper structural issue.

According to the bank’s official disclosure, the IDFC Bank fraud relates to deposits from Haryana Government entities. As reported in financial media, the bank has informed the RBI, filed a police complaint, and initiated regulatory reporting procedures.

In banking, confidence is critical. When governance concerns surface, markets react quickly.

Why Did IDFC Share Price Collapse So Sharply?

The fall in the IDFC share price reflects concerns about earnings sustainability, deposit stability, and internal controls.

The ₹590 crore fraud amount is significant relative to profitability. Analysts estimate it is nearly equivalent to six months of net profit. Even if recovery efforts succeed, provisions and legal costs may impact earnings for FY26 and FY27.

Seema Srivastava, Senior Research Analyst at SMC Global Securities, observed that the fraud has cast uncertainty over future earnings. She noted that Q3FY26 results already showed stable revenue growth but muted profitability, with net profit largely flat compared to last year.

The fraud disclosure now adds pressure to margins that were already under strain due to rising costs and provisioning.

How Big Is the Actual Financial Risk?

Understanding the scale of the issue requires looking at the numbers in context.

Financial Snapshot of IDFC First Bank

Rikin Shah of IIFL estimates that if about 10% of Haryana deposits belong to government accounts, potential outflow may reach ₹20 billion. While that is meaningful, it represents less than 1% of total deposits.

This suggests the immediate risk is more about sentiment and governance perception than balance sheet instability.

How Could Deposits and CASA Be Impacted?

Global brokerage Macquarie highlighted that state and central government deposits together account for roughly 8–10% of total deposits for the bank. It also noted that CASA ratios across the system have already declined by 500–600 basis points from post-COVID highs.

If some deposits move to PSU banks such as SBI, PNB, Canara Bank, or Union Bank, it may impact the funding mix. Private banks like HDFC Bank, ICICI Bank, and Axis Bank could also see incremental inflows.

However, the reaction so far appears specific to IDFC First Bank shares, rather than spreading across the banking sector.

What Do Technical Indicators Say About IDFC First Bank Share Price Today?

From a technical perspective, the stock has broken below the crucial ₹77–78 support zone with strong volumes.

According to Drumil Vithlani of Bonanza, the stock is trading below its 20, 50, 100, and 200 exponential moving averages, confirming both short-term and long-term weakness. The RSI is near 23, indicating oversold conditions.

Sachin Gupta of Choice Broking described the move as a structural breakdown. The stock sliced through its 50-day and 100-day moving averages, suggesting panic distribution rather than normal profit booking. The 200-day SMA near ₹77 is now a key level to watch.

Immediate support is around ₹66–67, while resistance is near ₹77. The earlier ₹81–83 zone has turned into a supply area.

Oversold does not automatically mean recovery. Event-driven declines can remain weak until clarity emerges.

Should Investors Buy, Sell, or Hold IDFC First Bank Share?

This is the most searched query right now: IDFC First Bank buy or sell?

Analysts are recommending caution. While valuations may look attractive after a 20% correction, uncertainty remains around:

• Forensic audit findings
• Recovery progress
• Regulatory response
• Deposit stability

Seema Srivastava emphasized that investors should adopt a wait-and-watch approach rather than averaging prematurely. Long-term holders should closely monitor governance strengthening measures before reassessing exposure.

For traders looking at IDFC First Bank target levels, stability above ₹80 with sustained volumes would be an early constructive signal.

Until then, volatility may persist.

When Could Stability Return?

Stability in the IDFC First Bank share price will depend on transparency and corrective action.

First, clarity from forensic audits.
Second, confirmation that deposit outflows remain contained.
Third, improved governance and risk-control disclosures.

Without these, price recovery may struggle to sustain.

Final Takeaway

The sharp fall in IDFC First Bank shares reflects governance-driven repricing rather than immediate solvency stress. The fraud amount is significant relative to profits, but the potential deposit impact appears limited in percentage terms.

The coming weeks will determine whether this remains a temporary shock or evolves into a longer-term structural issue.

For investors trying to understand how such corporate events impact banking valuations, liquidity ratios, and technical structures, disciplined financial analysis is essential. Structured learning platforms such as ICFM India provide analytical frameworks that help interpret market reactions professionally rather than emotionally.

Disclaimer

This article is strictly for educational and informational purposes only. It does not constitute investment advice, stock recommendations, or a buy/sell call on IDFC First Bank shares. Investors should conduct their own research and consult a qualified financial advisor before making any investment decisions. Stock markets are subject to risk, and past performance does not guarantee future results.

IDFC First Bank Share Price Today – Important Investor FAQs

Why is IDFC First Bank share falling today?

The IDFC First Bank share price today fell nearly 20% after the bank disclosed a ₹590 crore fraud at its Chandigarh branch involving deposits from Haryana Government entities. Investors reacted to concerns over earnings impact, governance oversight, and potential deposit outflows, leading to heavy selling pressure.

What is the ₹590 crore fraud in IDFC First Bank?

The fraud relates to irregular transactions worth approximately ₹590 crore identified at the bank’s Chandigarh branch. The matter involves deposits linked to Haryana Government entities. The bank has informed the RBI, filed police complaints, and initiated regulatory reporting procedures.

How much did IDFC First Bank share fall?

On February 23, the IDFC First Bank share price opened at ₹75.21 compared to its previous close of ₹83.56 and declined to an intraday low of ₹66.85, marking a fall of nearly 20% during morning trade.

Is IDFC First Bank share a buy after the 20% crash?

Market experts currently recommend caution. While valuations may appear attractive after the correction, uncertainty remains regarding recovery of funds, forensic audit findings, and potential deposit impact. Many analysts suggest a wait-and-watch approach rather than aggressive buying.

Will the fraud impact IDFC First Bank earnings?

Yes, the fraud amount of ₹590 crore is material relative to profitability and may affect earnings depending on recovery progress and provisioning. Analysts have noted that the amount is close to six months of net profit, raising concerns about near-term earnings sustainability.

How much deposit outflow can IDFC First Bank face?

Brokerage estimates suggest potential outflow could be around ₹20 billion if certain government deposits shift. This would represent roughly 0.7% of total deposits. While not systemically large, it may affect liquidity mix and agency commission income.

What are the key support and resistance levels for IDFC First Bank share?

Technical analysts identify immediate support near ₹66–67. Resistance is seen around ₹77, which aligns with the 200-day moving average. The earlier ₹81–83 zone has now turned into a supply area.

Could government deposits move to PSU banks?

Analysts believe some government deposits may shift to PSU banks such as SBI, PNB, Canara Bank, and Union Bank if scrutiny increases. However, no large-scale systemic deposit migration has been confirmed.

Is this fraud a solvency risk for IDFC First Bank?

Based on currently available data, the issue appears to be a governance and earnings concern rather than a capital adequacy or solvency crisis. The potential deposit impact remains below 1% of total deposits according to estimates.