RBI Allows PE Major Warburg Pincus to Buy 10% Stake in IDFC First Bank

The Reserve Bank of India (RBI) has approved private equity major Warburg Pincus to acquire up to a 9.99% stake in IDFC First Bank through its affiliate, Currant Sea Investments B.V., the private lender informed the stock exchange on Saturday.

"...we wish to inform that Currant Sea Investments B.V. has received the approval of the RBI with respect to its proposed investment of up to 9.99 percent of the paid-up share capital of the Bank," the filing stated.

The investment, announced in April, had already received clearance from the Competition Commission of India (CCI) on June 3. Through Currant Sea Investments B.V., Warburg has committed to invest ₹4,876 crore (approximately $587 million) in the bank to purchase around 81.27 crore Compulsorily Convertible Preference Shares (CCPS) at ₹60 per share.

This represents a 9.48% post-money stake once all CCPS are converted into equity.

Alongside the PE firm, Abu Dhabi’s ADIA is also investing ₹2,624 crore in the lender for a 5.10% stake. The total fundraising amounts to ₹7,500 crore (about $877 million), representing 15% total ownership upon full conversion.

Amid regulatory clearances, shareholder sentiment remains a concern. In May 2025, IDFC First Bank shareholders rejected a resolution to appoint a nominee director from Currant Sea to the board. The resolution was defeated with only 64.1% approval, below the required 75%.

“Regarding the right to nominate a director in articles of association not receiving requisite majority, we are confident of working through this matter, and we are also proceeding with seeking other remaining regulatory approvals in parallel,” the bank said in an exchange filing later.

IDFC First Bank has previously stated that the investment aims to support annual loan book growth of around 20%. The fresh capital will be used to fund new branches, ATMs, technology upgrades, credit cards, wealth management, and cash management businesses. Post-conversion, the bank’s capital adequacy ratio (CAR) is expected to rise from approximately 16.1% to 18.9%, with the CET-1 ratio improving to around 16.5%.