IDFC First Bank slips 4% after board approves ₹7,500 crore fund raise

Shares of IDFC First Bank are down 4 per cent at ₹60.70 on the BSE in Thursday’s intra-day trade amid heavy volumes on profit booking after the bank’s board approved preferential issue of equity capital (CCPS) amounting to ₹7,500 crore to Currant Sea Investments B.V. and Platinum Invictus B 2025 RSC.

 

Currant Sea Investments B.V., an affiliate company of Warburg Pincus LLC (₹4,876 crore), and Platinum Invictus B 2025 RSC Limited, a wholly owned subsidiary of ADIA (₹2,624 crore), are set to invest a combined total of ~ ₹7,500 crore in IDFC First Bank to fuel its next phase of growth. The proposed issues are subject to shareholder and regulatory approvals.

 

 

At 10:11 AM, IDFC First Bank was trading 2 per cent lower at ₹62.17, as compared to the 0.26 per cent decline in the BSE Sensex. A combined 54.13 million equity shares have changed hands on the NSE and BSE. In the past one month, IDFC First Bank had outperformed the market and rallied 20 per cent till Wednesday.  FOLLOW STOCK MARKET LIVE UPDATES HERE

 

Over the last six years, IDFC First Bank’s deposits grew 6x, loans and advances doubled, and CASA ratio has significantly improved from 8.7 per cent to 47.7 per cent. Profit after tax (PAT) rose from a loss of ₹1,944 crore in FY19 to a profit of ₹2,957 crore in FY24. However, profitability dipped in the first nine months (April to December) of the financial year 2024-25 (9MFY25) due to industry wide challenges in microfinance, which the bank has navigated well. 

 

IDFC First Bank said with this fund raise, its overall capital adequacy will increase from 16.1 per cent to 18.9 per cent, (CET-1 ratio at ~16.5 per cent, calculated on the capital position of the Bank as of December 31, 2024), strengthening the Bank’s balance sheet and positioning it for strong and self-sustaining profitable growth.  ALSO READ | Angel One shares fall 6% after disappointing Q4 earnings spook investors

 

V Vaidyanathan, managing director and CEO of IDFC FIRST Bank, said the Bank has firmly moved into profits and is now at a pivotal stage, where its income growth is expected to consistently exceed OPEX growth, leading to improved operating leverage. The management expects many businesses which are in the investment stage to turn profitable with scale.

 

Vishal Mahadevia, managing director, head of Asia Private Equity, and global co-head of Financial Services, Warburg Pincus, believes the Indian banking sector presents an exciting opportunity and is poised for long-term growth.

 

This investment is aimed at supporting the bank's continued growth, enabling it to meet the rising demand for financial products in the country, said Hamad Shahwan AlDhaheri, executive director of the private equities department at ADIA.  ALSO READ | Wipro shares dip 6% on disappointing Q4 results; weak Q1 guidance

 

IDFC FIRST Bank is a new-age private bank in India. It operates 971 branches spread over 60,000 locations including cities, towns, and villages across India. It is a full suite Universal Bank offering services across retail, MSME, rural, corporate, wealth management, private banking, Fastag, cash management, NRI and treasury solutions. The Bank’s customer deposits are growing at 25.2 per cent YoY and Loans & Advances growing by 20.3 per cent YoY (as of March 31, 2025 as per provisional disclosure) based on friendly user digital interface, ethical approach, and a strong brand.