IDFC First Bank has decided to raise about ₹3,200 crore through a special share issue to capitalize on growth opportunities. The bank will issue around 39.68 crore shares to major institutional investors in India, including LIC, HDFC Life, ABSL Insurance, Bajaj Allianz Life, ICICI Lombard, and SBI General Insurance.
Key Details:
- Share Price: The new shares will be issued at ₹80.63 each, which is a 4.51% premium to the last trading day’s closing price before the Board meeting.
- Capital Adequacy: This capital raise will boost the bank’s overall capital adequacy to 17.49%, up from 16.11% as of March 2024, strengthening its position for future growth.
Bank’s Strengths:
- Deposit Growth: Customer deposits have been growing at a 5-year CAGR of 37%, accelerating to 42% in FY24.
- Loan Book: The bank’s loan book, including credit substitutes, grew by 25% year-on-year in FY24.
- New Products: The bank has launched new products such as credit cards, gold loans, tractor loans, car financing, and affordable housing.
Financial Health:
- Asset Quality: As of March 2024, gross NPA is at 1.88% and net NPA is at 0.60%. For retail, rural, and SME finance books, gross and net NPAs are at 1.38% and 0.44%, respectively.
- Legacy Portfolio: Excluding the old infrastructure financing book, gross and net NPAs are 1.55% and 0.42%, respectively.
Bank’s Statement:
IDFC First Bank emphasized its unique ability to grow its loan book sustainably while maintaining high asset quality standards, showcasing its strong position in the market.
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