IDFC First Bank stock gains as board approves raising Rs 7,500 crore from Warburg, ADIA affiliates

Shares of IDFC First Bank gained over a percent on Thursday after the lender's board approved raising nearly ₹7,500 crore from two major investors, Currant Sea Investments B.V. and Platinum Invictus B 2025 RSC Ltd.

IDFC First Bank stock gained 1.20% to Rs 64.05 against the previous close of Rs 63.29 on SBE. Market cap  of the private bank rose to Rs 46,678 crore. 

The funds will be raised through a preferential issue of compulsorily convertible preference shares (CCPS) at ₹60 per share, with Currant Sea set to invest ₹4,876 crore and Platinum Invictus contributing ₹2,624 crore. Post-conversion, Currant Sea will hold a 9.48% stake, while Platinum Invictus will own 5.10% of the bank. The move aims to boost the bank's capital adequacy from 16.1% to 18.9%.

“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 at IDFC FIRST Bank. “It is great to have Warburg Pincus back and to welcome a wholly owned subsidiary of ADIA as our shareholder,” Vaidyanathan added. Hamad Shahwan AlDhaheri of ADIA mentioned that this investment aims to support the bank's growth and meet the rising demand for financial products in India.

Vishal Mahadevia of Warburg Pincus expressed excitement about reinvesting in IDFC First Bank, supporting its growth and sustainable return on equity (ROE) improvement. The bank's strategic funding boost is expected to strengthen its balance sheet and support its growth ambitions, positioning it strongly in the competitive Indian banking sector. The investments align with the bank's strategy as it moves into a phase where income growth is set to outpace operating expenses, enhancing overall profitability.