IDBI.NS
IDBI BANK LIMITEDClosedIDBI.NS discounted cash flow valuation
IDBI BANK LIMITED is a banks - regional company. Its cash flows include lending and deposits, so free cash flow isn't owner earnings and this model can mislead. Compare it with peers on book value and earnings instead.
IDBI.NS Fair Value
Reverse DCF: today's price implies -11.5% a year of FCF growth for years 1–5, against 7.9% in this model.
Model: 7.9% from 3-yr revenue CAGR. Fades linearly to terminal growth by year 10.
Model: 9.40% (CAPM, see the build-up).
Long-run growth after year 10; keep it at or below nominal GDP.
Value Bridge
| PV of free cash flow, years 1–10 | INR 1.48T |
|---|---|
| PV of terminal value (55% of EV) | INR 1.82T |
| Enterprise value | INR 3.30T |
| + Cash & investments | INR 132.83B |
| − Total debt | −INR 261.81B |
| Equity value | INR 3.17T |
| ÷ Shares outstanding | 10.75B |
| Value per share | INR 294.95 |
| Market cap | INR 971.91B |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.26% |
|---|---|
| Beta (clamped 0.5–2.5) | 0.91 |
| Equity risk premium | 5.00% |
| Cost of equity (CAPM) | 9.83% |
| Pre-tax cost of debt | 12.00% |
| Tax rate | 35.0% |
| Debt / (equity + debt) | 21.2% |
| WACC | 9.40% |
Cost of debt is interest expense ÷ total debt, held between the risk-free rate and 12%.
Free Cash Flow: History and Projection
Sensitivity: Value per Share
| WACC ↓ / g → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 7.40% | 368.11 | 394.77 | 426.86 | 466.23 | 515.68 |
| 8.40% | 310.17 | 328.37 | 349.65 | 374.87 | 405.22 |
| 9.40% | 267.02 | 280.04 | 294.95 | 312.17 | 332.31 |
| 10.40% | 233.67 | 243.32 | 254.19 | 266.52 | 280.64 |
| 11.40% | 207.15 | 214.50 | 222.68 | 231.82 | 242.12 |
Green is above today's price, red below (full colour at ±30%). The outlined centre cell is the current inputs.
Projected Cash Flows
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Base (FY2026) | — | INR 164.34B | — | — |
| Year 1 | 7.9% | INR 177.33B | 0.914 | INR 162.09B |
| Year 2 | 7.9% | INR 191.34B | 0.836 | INR 159.87B |
| Year 3 | 7.9% | INR 206.45B | 0.764 | INR 157.68B |
| Year 4 | 7.9% | INR 222.76B | 0.698 | INR 155.51B |
| Year 5 | 7.9% | INR 240.36B | 0.638 | INR 153.38B |
| Year 6 | 6.8% | INR 256.75B | 0.583 | INR 149.76B |
| Year 7 | 5.7% | INR 271.49B | 0.533 | INR 144.75B |
| Year 8 | 4.7% | INR 284.14B | 0.487 | INR 138.48B |
| Year 9 | 3.6% | INR 294.31B | 0.445 | INR 131.11B |
| Year 10 | 2.5% | INR 301.67B | 0.407 | INR 122.85B |
Method
Two-stage free-cash-flow model, the same as the bot's lgf dcf: five years at the chosen growth rate, a straight-line fade to terminal growth by year ten, then a Gordon-growth terminal value. Everything is discounted at WACC.
Base cash flow is the trailing four quarters of operating cash flow minus capital expenditure (the latest fiscal year when quarters are missing). Default growth uses analyst long-term growth when Yahoo publishes it, else the average of next year's EPS and revenue growth, else revenue CAGR, held between −5% and 25%.
A DCF is only as good as its inputs. The terminal value is usually most of the answer, so read the sensitivity grid before the headline number. This is a model, not investment advice.