IDFC First Bank board approves plan to raise ₹3,200 cr via preferential issue

Mumbai: IDFC First Bank Ltd. on Thursday said its board approved a proposal to raise ₹3,200 crore through a preferential allotment of shares. The private sector lender will be issuing 39.68 crore shares to marquee investors at a price of ₹80.63 per share, IDFC First Bank said in an exchange filing.

The proposed issue price is at a premium of 4.51% to the last closing of ₹77.15, prior to the board meeting.

The proposed allottees include Life Insurance Corporation of India, HDFC Life Insurance, Aditya Birla Sun Life Insurance, Bajaj Allianz Life Insurance, ICICI Lombard General Insurance and SBI General Insurance.

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Post this issue, LIC would have the largest stake in the lender at 2.68%, followed by HDFC Life Insurance at 1.31% and Aditya Birla Sun Life Insurance at 1.06%.

As much as 47% of the proposed issue will be subscribed to by the state-run LIC.

Use of capital

The bank will utilize this capital for future growth opportunities with high asset quality.

“After our last capital raise of ₹3,000 crore, the RBI had raised the risk weights on consumer credit exposures in November 2023, which consumed around 1% of the bank's capital. Hence, this capital is being raised prudently for future growth of the bank while factoring the new risk weightages,” said the bank.

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Post this, the book value per share would increase by 4.11% to ₹47.36 as the fundraise is at a price higher than the current BVPS, based on March 31, 2024 numbers.

IDFC First Bank reported a net profit of ₹724.35 crore for the quarter ended 31 March, down from ₹802.62 crore during the corresponding period last year.

Net interest income (NII) grew 24% from ₹3,597 crore in Q4FY23 to ₹4,469 crore in Q4FY24.

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