IDFC FIRST Bank's board okays Rs 7,500 cr fundraising from Warburg, ADIA

The board approved a preferential issue of equity capital (CCPS) amounting to approximately Rs 4,876 crore to Currant Sea Investments, an affiliate company of global growth investor Warburg Pincus and approximately Rs 2,624 crore to Platinum Invictus Limited, a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) managed by its Private Equities Department.

The proposed issues are subject to shareholder and regulatory approvals. The rationale behind this fundraising is that the bank plans to scale up its optimal profitability and aims to grow the overall loan book at 20 per cent for the next few years, the bank said in an investor presentation.

Over the last six years, IDFC FIRST Bank has undergone a successful transformation from its legacy as an infrastructure-focused DFI to becoming a modern, technology-driven, universal bank.

During this time, deposits grew 6x, loans and advances doubled, and CASA ratio has significantly improved from 8.7 per cent to 47.7 per cent. PAT rose from a loss of Rs 1,944 crore in FY19 to a profit of Rs 2,957 crore in FY24.

“However, profitability dipped in 9M FY25 due to industry wide challenges in microfinance, which the bank has navigated well. With this fund raise, the overall capital adequacy will increase from 16.1 per cent to 18.9 per cent,” said the bank in a regulatory filing.

“The Bank has firmly moved into profits and is now at a pivotal stage, where our income growth is expected to consistently exceed OPEX growth, leading to improved operating leverage. We expect many businesses which are in the investment stage to turn profitable with scale,” said V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank.

“It is great to have Warburg Pincus back and to welcome a wholly owned subsidiary of ADIA as our shareholder. We thank them both for believing in us and our future growth plans and for investing in us even under volatile global situations,” he added.

—IANS