Private sector lender IDFC First Bank has announced plans to raise ₹7,500 crore in fresh equity capital from Compulsorily Convertible Preference Shares (CCPS), issued at ₹60 apiece to existing marquee investors Warburg Pincus and the Abu Dhabi Investment Authority (ADIA).
The lender told stock exchanges on Thursday that ₹4,876 crore worth of CCPS will be issued to Currant Sea Investments BV, an affiliate of Warburg Pincus, while ₹2,624 crore worth of CCPS will be issued to Platinum Invictus B 2025 RSC, a wholly-owned subsidiary of ADIA.
"The bank has moved into profits and is at a pivotal stage where income growth is expected to consistently exceed operating expense growth, leading to improved operational leverage," said V Vaidyanathan, managing director, IDFC First Bank. "We expect many of our investment-stage businesses to turn profitable as they scale." Transactions are subject to approval from the bank's shareholders and regulators. Once completed, Warburg Pincus will own a 9.48% stake, while ADIA will hold a 5.10% stake in IDFC First Bank.
The lender said it has been focusing on building a robust infrastructure, including an expanding branch network, a growing number of ATMs, and advancements in technology. The bank has also launched several new business segments, such as credit cards, cash management, and wealth management, to position itself as a comprehensive, universal bank, it said. The bank has emphasised that these new business lines need to be scaled up to reach optimal profitability. To support this, IDFC First Bank has set a goal of growing its loan book by 20% annually over the next few years. The funds raised from this equity issuance will strengthen the bank's capital adequacy, reducing the need for frequent capital raises in the future.
According to the provisional results for the quarter ending March 31, 2025, the bank's customer deposits grew from ₹1.93 lakh crore as of March 31, 2024, to ₹2.42 lakh crore as of March 31, 2025, reflecting a 25.2% year-on-year increase. Meanwhile, loans and advances rose from ₹2 lakh crore to ₹2.41 lakh crore, marking a 20.3% YoY growth. However, despite strong growth in deposits and advances, the bank reported a 45% drop in profits for the first nine months of FY25.
The lender told stock exchanges on Thursday that ₹4,876 crore worth of CCPS will be issued to Currant Sea Investments BV, an affiliate of Warburg Pincus, while ₹2,624 crore worth of CCPS will be issued to Platinum Invictus B 2025 RSC, a wholly-owned subsidiary of ADIA.
"The bank has moved into profits and is at a pivotal stage where income growth is expected to consistently exceed operating expense growth, leading to improved operational leverage," said V Vaidyanathan, managing director, IDFC First Bank. "We expect many of our investment-stage businesses to turn profitable as they scale." Transactions are subject to approval from the bank's shareholders and regulators. Once completed, Warburg Pincus will own a 9.48% stake, while ADIA will hold a 5.10% stake in IDFC First Bank.
The lender said it has been focusing on building a robust infrastructure, including an expanding branch network, a growing number of ATMs, and advancements in technology. The bank has also launched several new business segments, such as credit cards, cash management, and wealth management, to position itself as a comprehensive, universal bank, it said. The bank has emphasised that these new business lines need to be scaled up to reach optimal profitability. To support this, IDFC First Bank has set a goal of growing its loan book by 20% annually over the next few years. The funds raised from this equity issuance will strengthen the bank's capital adequacy, reducing the need for frequent capital raises in the future.
According to the provisional results for the quarter ending March 31, 2025, the bank's customer deposits grew from ₹1.93 lakh crore as of March 31, 2024, to ₹2.42 lakh crore as of March 31, 2025, reflecting a 25.2% year-on-year increase. Meanwhile, loans and advances rose from ₹2 lakh crore to ₹2.41 lakh crore, marking a 20.3% YoY growth. However, despite strong growth in deposits and advances, the bank reported a 45% drop in profits for the first nine months of FY25.
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