Daijiworld Media Network- Mumbai
Mumbai, Apr 17: In a significant development, the board of IDFC FIRST Bank has approved a major fundraising move, clearing the decks to raise up to Rs 7,500 crore from leading global investors Warburg Pincus and the Abu Dhabi Investment Authority (ADIA), amidst ongoing global financial uncertainties.
As per the bank's official communication, a preferential issue of equity capital in the form of Compulsorily Convertible Preference Shares (CCPS) has been approved. This includes Rs 4,876 crore from Currant Sea Investments, a Warburg Pincus affiliate, and Rs 2,624 crore from Platinum Invictus Limited, a wholly-owned subsidiary of ADIA managed by its Private Equities Department.
The transaction remains subject to statutory and shareholder approvals.
Outlining the rationale behind the decision, the bank stated that the infusion will help accelerate its strategy to scale operations and enhance profitability. IDFC FIRST Bank aims to grow its overall loan book by 20 per cent annually over the next few years.
Since its transformation from an infrastructure-focused Development Finance Institution to a technology-driven universal bank six years ago, IDFC FIRST Bank has shown strong performance. Deposits have grown sixfold, loans have doubled, and the CASA (Current Account Savings Account) ratio has surged from 8.7 per cent to 47.7 per cent. The bank has also swung from a loss of Rs 1,944 crore in FY19 to a profit of Rs 2,957 crore in FY24.
While the bank faced challenges in the microfinance segment during the first nine months of FY25, it managed to navigate the turbulence effectively. With the fresh capital infusion, the overall capital adequacy ratio is projected to rise from 16.1 per cent to 18.9 per cent.
V Vaidyanathan, Managing Director and CEO of IDFC FIRST Bank, expressed optimism about the future. “The bank has firmly moved into the profit zone and is now positioned for strong operating leverage. We expect several of our investment-stage businesses to become profitable as they scale,” he said.
Welcoming the investments, Vaidyanathan added, “We are delighted to have Warburg Pincus back on board and to welcome a wholly owned subsidiary of ADIA. We deeply appreciate their confidence in our vision and are grateful for their support amid global volatility.”
This strategic capital boost marks another milestone in IDFC FIRST Bank’s journey of growth and transformation.