Private equity firm Warburg Pincus and a unit of the Abu Dhabi Investment Authority (ADIA) are set to invest up to INR75bn (approximately $877m) in India’s IDFC FIRST Bank, in a significant capital raise aimed at accelerating the lender’s growth strategy.
According to a statement from the bank, the investment will be made through the issuance of convertible shares, which, upon full conversion, will grant Warburg Pincus and ADIA a combined 15% stake in the bank.
Currant Sea Investments BV, an affiliate of Warburg Pincus and an existing shareholder, will contribute INR48.76bn for a 9.8% stake. Platinum Invictus B 2025 RSC, an ADIA-linked entity, will invest INR26.24bn for a 5.1% stake.
The capital infusion is expected to support IDFC FIRST Bank’s plan to grow its INR2.31tn loan book by around 20% annually over the coming years.
The fundraising will boost the bank’s book value per share by 2.3% and raise its capital adequacy ratio from 16.1% to 18.9%, positioning it more competitively in India’s fast-evolving financial services market.
The deal remains subject to regulatory and shareholder approvals. Shares in IDFC FIRST Bank initially dropped 4.2% following the announcement, before narrowing losses to close 2% lower on the day.
