IDFC First Bank board approves fundraising of Rs 7,500 crore
Mumbai: The Board of Directors of IDFC FIRST Bank today approved a preferential issue of equity capital (CCPS) of approximately Rs 4,876 crore to Current Sea Investments B.V., a subsidiary of Warburg Pincus LLC. In addition, an amount of approximately Rs 2,624 crore was approved to Platinum Invictus B 2025 RSC Ltd., a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA) and operated by its private equity arm.
Over the last six years, IDFC FIRST Bank has successfully transformed itself from an infrastructure-focused development finance institution (DFI) to a modern, tech-driven and pan-India universal bank. In this journey, the Bank has invested heavily in distribution, technology and talent to position itself as one of the leading private sector banks in the country.
Over the years, the bank’s deposits have grown six times, loans and advances have doubled, and the CASA ratio has increased from 8.7% to 47.7%. While the bank incurred a loss of Rs 1,944 crore in FY19, it reported a profit of Rs 2,957 crore in FY24. Although the profit declined slightly in the first three quarters of FY25 due to challenges in the microfinance sector, the bank has dealt with these challenges effectively. With this new fund raise, the bank’s overall capital adequacy ratio will increase from 16.1% to 18.9% (with CET-1 ratio being around 16.5% as on December 31, 2024). This will further strengthen the bank’s balance sheet and provide momentum towards self-sustaining growth with profitability going forward.
Mr. V. Vaidyanathan, Managing Director & CEO, IDFC FIRST Bank, said, “We have built the Bank from day one with a long-term vision to build a world-class bank. Our aim is to establish a culture that is customer sensitive and delivers excellent service to them. We are also very technologically advanced and believe in constantly adopting new technologies.”
He added, “The Bank is now firmly on the path to profitability and is at a critical juncture where our revenue growth is expected to regularly exceed OPEX growth. This will lead to improved operating profitability. Many businesses that were till now in the investment mode will now be able to earn significant profits.”
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He further said, “We are happy that Warburg Pincus is joining us once again and a wholly owned subsidiary of ADIA is joining our shareholders. We express our gratitude to both the organizations for showing faith in us and our future plans even amidst global instability. We believe that if we prove ourselves as a strong, respected and preferred organization by customers, and operate with strong profitability, then we can give long-term sustainable benefits to our stakeholders.” Maharashtra: CM justifies promoting Hindi in schools
Vishal Mahadevia, Managing Director, Head- Asia Private Equity, and Global Co-Head- Financial Services, Warburg Pincus, said, “We believe the Indian banking sector is full of exciting opportunities and is poised for long-term growth. At Warburg Pincus, we have a long history of partnering with excellent teams. We have known the IDFC FIRST Bank team for over a decade since their early days. We have closely witnessed the building of the bank. We are excited to be reinvesting in the IDFC FIRST Bank team to support them in their next growth and sustainable ROE improvement.”
Hamad Shahwan Aldhaheri, Executive Director – Private Equity Department, ADIA, said, “IDFC FIRST Bank has established itself as one of India’s leading private sector banks, backed by an experienced management team. It has expanded its technological and branch infrastructure over the years and is well positioned for the future. This investment is focused on supporting the bank’s continued growth, enabling it to meet the growing demand for financial products in the country.”
