>IDBI BANK LIMITED (HDFC SECURITIES)

Techno-Fundamental Stock Pick

COMPANY BACKGROUND
IDBI was incorporated as a Development Financial Institution in 1964 and was a wholly-owned subsidiary of the Reserve Bank of India (RBI). In 1976, the RBI surrendered its 100% stake to the government. In 2005, IDBI transformed itself into a full-service commercial bank after merging its commercial banking arm, IDBI Bank, into itself. More recently, the amalgamation of United Western Bank (UWB) with IDBI Bank gave the latter the much needed branch network to enhance its retail presence.

IDBI is one the leading public sector banks of India. At the end of June 2009, IDBI has 566 branches and 972 ATMs and intends to set up more branches over the next year, thus taking its total number of branches to 750 by March 2010. IDBI Bank has four wholly owned
subsidiaries: IDBI Capital Market Services (ICMS), IDBI Home Finance, IDBI Gilts and IDBI Intech. In FY09, IDBI reported a total consolidated income of Rs. 13,346.9 cr, up 34% y-o-y; operating expenses increased 40% y-o-y to Rs. 12,041 cr and PAT for the year
stood at Rs. 766.5 cr, up 2.7% y-o-y. This is lower than the Rs. 859 cr PAT recorded on a standalone basis.

IDBI Capital Market Services Limited offers a full suite of financial products and services to institutional, corporate and retail clients. Its businesses include Stock Broking, Distribution of Financial Products, Merchant Banking, Corporate Advisory Services, Debt Arranging
& Underwriting, Portfolio Management of Pension / PF Funds & Research Services. Next, IDBI Homefinance commenced its business with the acquisition of Tata Homefinance Limited in September 2003. The company, since its inception, initiated series of measures to
expand its retail reach, strengthen its brand image, improve its asset quality and excel its business growth.

IDBI Intech Limited (IDBI Intech) was incorporated in March 2000, as a wholly-owned subsidiary of IDBI Bank to undertake the IT related activities of the Bank. The major business activities of the Company are Information Technology Services, Information Security
Practice, Knowledge Management Services, National Contact Center and Outbound Sales Team (OBST). Moreover, IDBI Gilts Limited (IDBI Gilts) was set up as a wholly owned subsidiary of your Bank to undertake Primary Dealer [PD] Business with paid up capital of Rs.100 crore. IDBI Gilts commenced its operations as Primary Dealer w.e.f. July 24, 2007. The company presently focuses on Bond trading, underwriting in auctions of primary issuance of government dated securities and treasury bills.

IDBI Fortis Life Insurance Company Limited (48% holding) is a joint venture of IDBI Bank Limited, Federal Bank Limited and Fortis Insurance International. The company commenced operations in March 2008 and the current year is the first full year of operations. IDBI Fortis entered the market with several innovative products consisting of WealthsuranceTM - an insured wealth plan, BondsuranceTM - an insurance plan with guaranteed returns, HomesuranceTM - an insurance plan for home loans and RetiresuranceTM - a retirement plan. The performance of all the above mentioned entities has been summarized below.

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