IDFC First Bank approves ₹7,500 cr fundraise from Warburg Pincus and ADIA subsidiary

The board of private sector lender IDFC First Bank approved a fundraise of up to ₹7,500 crore from two investors, Warburg Pincus and Platinum Invictus, a subsidiary of Abu Dhabi Investment Authority (ADIA) on April 17, Thursday.

“The Board…approved a preferential issue of equity capital (CCPS) amounting to approximately ₹4,876 crore to Currant Sea Investments B.V., an affiliate company of global growth investor Warburg Pincus LLC and approximately ₹2,624 crore to Platinum Invictus B 2025 RSC Ltd., a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) managed by its Private Equities Department,” the company said in the statement.

The approved fundraise of up to ₹7,500 crore (approximately $900 million) will be raised through a preferential issue of compulsorily convertible preference shares (CCPS) to two marquee investors — Currant Sea Investments B.V., an affiliate of Warburg Pincus, and Platinum Invictus B 2025 RSC Ltd., a subsidiary of ADIA. Currant Sea will invest ₹4,876 crore, while Platinum Invictus will contribute ₹2,624 crore. JSA advocates & solicitors advised IDFC FIRST Bank on its fundraise. The fundraise is subject to shareholder and regulatory approvals.​

“We believe the Indian banking sector presents an exciting opportunity and is poised for long-term growth. We have known the IDFC First Bank team for over a decade dating back to their early days and have closely seen the build out of the bank. 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,” said Vishal Mahadevia, Managing Director, Head of Asia Private Equity, and Global Co-Head of Financial Services, Warburg Pincus.

The bank will issue 81.26 crore CCPS to Currant Sea and 43.71 crore CCPS to Platinum Invictus at ₹60 per share. Upon conversion, Currant Sea will hold a 9.48% stake and Platinum Invictus a 5.10% stake in the bank on a post-money basis.

The proposed issues are still, subject to shareholder and regulatory approvals. The funds will be deployed to grow the overall loan book at ~20% for the next few years. Upon completion, the bank’s overall capital adequacy ratio will rise to 18.9%, from 16.1%, with the Common Equity Tier-1 ratio (CET-1 ratio) increasing to 16.5%, further strengthening its balance sheet.

“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,” said V Vaidyanathan, Managing Director & CEO, IDFC FIRST Bank, in a statement.

IDFC First Bank reported a 53% year-on-year decline in net profit to ₹339 crore for Q3 FY25, down from ₹716 crore in the same quarter last year. The bank attributed the drop to reduced income from slower disbursal of microfinance loans, higher provisions in that segment, and normalization of credit costs in non-microfinance businesses. However, net interest income (NII) grew 14% YoY to ₹4,902 crore, up from ₹4,287 crore in Q3 FY24. For the nine months ended December 2024, NII rose 20.1% YoY. Net interest margin (NIM) declined to 6.04% from 6.18% in Q2 FY25, due to a drop-in microfinance activity and a higher share of wholesale banking. Asset quality improved, with gross NPA at 1.94% (down from 2.04%) and net NPA at 0.52% (down from 0.68%) as of December 31, 2024.

Shares of IDFC First Bank Ltd. are currently trading marginally lower at ₹63.08, from the previous close of ₹63.32. The stock is down 4% so far in 2025.