India’s IDFC FIRST Bank announced today that Platinum Invictus B 2025 RSC, a wholly owned subsidiary of Abu Dhabi Investment Authority (ADIA), and Currant Sea Investments B.V., an affiliate company of Warburg Pincus, will invest a combined total of 75 billion rupees ($877 million) to fuel the bank’s next phase of growth.
The bank’s board of directors approved today a preferential issue of equity capital (CCPS) amounting to approximately 48.76 billion rupees to Currant Sea Investments B.V. and approximately 26.24 billion rupees to ADIA’s Platinum Invictus B 2025 RSC. The proposed issues are subject to shareholder and regulatory approvals.
ADIA targets India’s growing banking sector
“IDFC First Bank has firmly established itself as one of India’s leading private sector banks, backed by a seasoned management team. It has expanded both its technology and branch infrastructure over a number of years and is well-positioned for the future. This investment is aimed at supporting the bank’s continued growth, enabling it to meet the rising demand for financial products in the country,” stated Hamad Shahwan AlDhaheri, executive director of the private equities department at ADIA.
Over the last six years, IDFC FIRST Bank has undergone a successful transformation from its legacy as an infrastructure-focused DFI to becoming a modern, technology-driven, pan-India, universal bank. During the process, it has made significant investments in distribution, technology and talent to become a leading private sector bank in India.
During this time, deposits grew 6 times, loans and advances doubled, and the CASA ratio significantly improved from 8.7 percent to 47.7 percent. However, profitability dipped in 9M FY25 due to industry-wide challenges in microfinance, which the bank has navigated well. In the October-to-December quarter, the bank reported a 53 percent drop in net profit.
Commenting on the bank’s growth prospects, V Vaidyanathan, managing director & CEO, IDFC FIRST Bank, said, “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 that are in the investment stage to turn profitable with scale.”
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Bank’s capital adequacy to rise to 18.9 percent
With this fund raise, the bank’s overall capital adequacy will increase from 16.1 percent to 18.9 percent, strengthening the balance sheet and positioning it for strong and self-sustaining profitable growth, said IDFC FIRST Bank in a statement.
Following the announcement, shares in IDFC FIRST Bank declined 0.54 percent to INR62.98.
“We believe the Indian banking sector presents an exciting opportunity and is poised for long-term growth. At Warburg Pincus, we have a long track record of partnering with exceptional teams. We are excited to reinvest in the IDFC First Bank team to support them in the next phase of growth and sustainable ROE improvement,” commented Vishal Mahadevia, managing director, head of Asia private equity, and global co-head of financial services, Warburg Pincus.
