IDFC First Bank Ropes In Warburg Pincus, ADIA With Rs 7,500 Crore Investment

IDFC First Bank's board has approved raising up to Rs7,500 crore ($877 million) from affiliates of American private equity firm Warburg Pincus and UAE's sovereign wealth fund, Abu Dhabi Investment Authority (ADIA).

Currant Sea Investments B.V., an affiliate of global growth investor Warburg Pincus, will invest Rs 4,876 crore for a 9.8% stake. Meanwhile, Platinum Invictus B 2025 RSC, a wholly-owned subsidiary of ADIA, will invest around Rs 2,624 crore for a 5.1% stake, the bank said in an exchange filing.

"It is great to have Warburg Pincus back and to welcome a wholly owned subsidiary of ADIA as our shareholder. We thank them both for believing in us and our future growth plans, and for investing in us even amid volatile global conditions," said V. Vaidyanathan, Managing Director & CEO of IDFC FIRST Bank.

The investments are subject to shareholder and regulatory approvals.

IDFC First Bank Shares Dip Post Announcement

Shares of IDFC First Bank fell as much as 2% to Rs 62.17 on the BSE following the investment announcement. However, the stock recovered most of its losses and was trading 0.46% lower by 2:42 PM.

Warburg Pincus and ADIA will together acquire a 15% stake in the mid-sized private lender, which operates 971 branches and has a loan book of Rs 2.31 trillion and deposits totaling Rs 2.27 trillion.

The proposed capital infusion is expected to boost IDFC First Bank’s book value per share by 2.3%, according to the bank's statement.

Vishal Mahadevia, Managing Director, Head of Asia Private Equity and Global Co-Head of Financial Services at Warburg Pincus, said: “We have known the IDFC First Bank team for over a decade, dating back to their early days, and have closely watched the build-out of the bank. We are excited to re-invest in the IDFC First Bank team to support their next phase of growth and sustainable ROE improvement.”

IDFC First Bank noted that over the last six years, its deposits have grown sixfold, loans and advances have doubled, and the CASA ratio has significantly improved from 8.7% to 47.7%. Profit after tax (PAT) surged from a loss of Rs1,944 crore in FY19 to a profit of Rs2,957 crore in FY24.

However, the bank acknowledged a dip in profitability during the first nine months (April to December) of FY25 due to the ongoing “crisis” in the microfinance sector—an issue it claims to have navigated well.