Private equity major Warburg Pincus and the Abu Dhabi Investment Authority (ADIA) will invest Rs 7,500 crore (around $877 million) in IDFC First Bank through a preferential allotment of equity shares, the Indian lender said in a statement on Wednesday.
Currant Sea Investments B.V., an affiliate of Warburg Pincus, will invest Rs 4,876 crore, while Platinum Invictus B 2025 RSC Ltd, a wholly owned subsidiary of ADIA, will put in Rs 2,624 crore. The transaction, subject to shareholder and regulatory approvals, marks a fresh round of growth capital for the private sector bank.
The infusion will boost the bank’s capital adequacy ratio from 16.1% to 18.9% (CET-1 at 16.5%), positioning it for its “next phase of strong and self-sustaining profitable growth,” the company said.
Since its formation via the merger of IDFC Bank and Capital First in 2018, the firm claims that its deposits grew 6x, loans and advances doubled, and the CASA ratio significantly improved from 8.7% to 47.7%.
Profit after tax rose from a loss of Rs 1,944 crore in FY19 to a profit of Rs 2,957 crore in FY24. However, the firm said that profitability dipped in 9M FY25 due to industry-wide challenges in microfinance.
“We believe the Indian banking sector presents an exciting opportunity and is poised for long-term growth,” Vishal Mahadevia, Managing Director, Head of Asia Private Equity, and Global Co-Head of Financial Services, Warburg Pincus, said.
Other investments in the sector by Warburg include Home First Finance Company, Avanse Financial Services, SBI General Insurance and IndiaFirst Life Insurance.
