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IDFC First Bank Secures Rs 7,500 Crore Investment from Warburg Pincus and ADIA

The capital infusion, subject to approvals, will strengthen the bank's capital adequacy and support its next phase of growth.

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Overview

  • IDFC First Bank's board approved a Rs 7,500 crore preferential share issue to Warburg Pincus and ADIA affiliates, pending shareholder and regulatory clearances.
  • The investment will increase the bank's capital adequacy ratio from 16.1% to 18.9%, bolstering its financial position for future expansion.
  • Warburg Pincus affiliate Currant Sea Investments will acquire a 9.8% stake for Rs 4,876 crore, while ADIA subsidiary Platinum Invictus B 2025 RSC will take a 5.1% stake for Rs 2,624 crore.
  • The strategic capital raise follows a six-year transformation of IDFC First Bank, which saw deposits grow sixfold, loans double, and profitability achieved in FY24.
  • Despite recent profitability pressures due to microfinance sector challenges, the bank plans to scale operations and grow its loan book by 20% annually in the coming years.