IDFC Bank to raise up to $880 million from Warburg, ADIA

Mumbai-based IDFC First Bank Ltd has approved a fundraise of up to Rs7,500 crore (about $880 million) through investments from affiliates of Warburg Pincus and the Abu Dhabi Investment Authority (ADIA), the private lender said following a board meeting held on Thursday.

With the move, the bank plans to fortify its balance sheet and support its next phase of growth.

The investment will be made through a preferential issue of compulsorily convertible preference shares (CCPS) at Rs60 per share.

Currant Sea Investments B.V., an affiliate of global investment firm Warburg Pincus, will contribute Rs4,876 crore, while Platinum Invictus B 2025 RSC Ltd, a wholly owned arm of ADIA, will invest Rs2,624 crore.

Following the conversion of these shares, Currant Sea Investments will hold a 9.48% stake and Platinum Invictus will hold 5.10%, representing a combined post-money ownership of 15% in IDFC First Bank.

In a statement, the bank said the fresh infusion of funds will increase its capital adequacy ratio from 16.1% to 18.9%, with the Common Equity Tier-1 (CET-1) ratio rising to 16.5%, based on its financial position as of 31 December 2024.

Additionally, the transaction is expected to enhance the bank’s book value per share by 2.3%.

IDFC First Bank has 971 branches, with a loan book of Rs2.31 trillion and a deposit base of Rs2.27 trillion.

“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 chief executive officer (CEO) of IDFC First Bank. “It is great to have Warburg Pincus back and to welcome a wholly owned subsidiary of ADIA as our shareholder.”

Vishal Mahadevia of Warburg Pincus said, “We are excited to re-invest behind the IDFC First Bank team to support them in the next phase of growth and sustainable ROE improvement.”

Hamad Shahwan AlDhaheri of ADIA said, “This investment is aimed at supporting the bank’s continued growth, enabling it to meet the rising demand for financial products in the country.”