IDFC FIRST Bank to Raise Rs 7,500 Crore from Warburg Pincus and ADIA
IDFC FIRST Bank is set to receive a significant capital boost, with global investment giants Warburg Pincus and the Abu Dhabi Investment Authority (ADIA) committing a combined infusion of Rs 7,500 crore. This move is aimed at propelling the bank into its next phase of growth as it transitions into a modern, technology-driven, universal bank.
In a filing to the stock exchanges, the bank announced that its board has approved a preferential issue of equity capital worth Rs 4,876 crore to Currant Sea Investments B.V., an affiliate of Warburg Pincus, and Rs 2,624 crore to Platinum Invictus B 2025 RSC Ltd, a wholly owned subsidiary of ADIA managed by its Private Equities Department. The proposed transaction is subject to requisite shareholder and regulatory approvals.
The capital infusion marks a milestone in the bank’s six-year journey from its roots as an infrastructure-focused development finance institution to a digitally empowered retail and commercial bank. During this period, IDFC FIRST Bank has significantly expanded its digital platforms and distribution network. The bank reported a sixfold increase in deposits and a doubling of its loan book.
The current account-savings account (CASA) ratio has improved dramatically from 8.7% in FY19 to 47.7% in FY24. Over the same period, the bank’s financial performance turned around, swinging from a Rs 1,944 crore loss in FY19 to a Rs 2,957 crore profit in FY24.
Despite facing challenges in the microfinance segment during FY25, the bank has managed to outperform many of its peers. With this capital infusion, the bank's capital adequacy ratio is projected to improve from 16.1% to 18.9%, and its core equity tier-1 capital ratio is expected to reach approximately 16.5%, based on its capital position as of December 2024.
Calling the investment a pivotal moment, V Vaidyanathan, MD & CEO of IDFC FIRST Bank, said, “From day one, we have always built our foundation with a long-term vision of creating a world-class bank in India. We are technologically advanced and strive to offer the highest levels of customer service”.
Vaidyanathan added, “It is great to have Warburg Pincus back and to welcome ADIA as a shareholder. We thank them for their confidence in our future growth plans, especially in a volatile global environment”.
As of 10:50 AM on Thursday, shares of IDFC FIRST Bank were trading at Rs 63.53 on the BSE, up 0.38%.
