IDFC First's board approves fresh capital raise of Rs 2,000 crore to bolster growth
May 01, 2020
Mumbai (Maharashtra) [India], May 1 : IDFC First Bank said on Friday it proposes to raise equity capital of Rs 2,000 crore by way of a preferential issue to marquee investors.
They include ICICI Prudential Life Insurance Company, HDFC Life Insurance Company, Bajaj Allianz Life Insurance, Dayside Investment (Warburg Pincus group) and promoter IDFC Ltd.
The board of directors considered and approved the proposal to raise Rs 2,000 crore through a preferential issue of fully paid-up 86.24 crore equity shares at a face value of Rs 10 each at a price of Rs 23.19 per equity share to existing and new investors.
The bank will raise fresh equity capital of Rs 800 crore from IDFC Financial Holding Company Ltd, Rs 600 crore from ICICI Prudential Life Insurance Company Ltd, Rs 200 crore from Dayside Investment Ltd (Warburg Pincus group), Rs 200 crore from HDFC Life Insurance Company Ltd and Rs 200 crore from Bajaj Allianz Life Insurance Ltd.
The relevant date for determining the floor price of equity shares for the purpose of preferential allotment in accordance with the SEBI ICDR Regulations is May 4.
The bank's revised book value per share after the capital raise will be Rs 30.40 compared to Rs 31.82 as on December 31, 2019. This is calculated on net worth as of December 31 plus a fresh issue of Rs 2,000 crore and divided by the number of shares post issue.
The lender said it is already well capitalised with common equity tier one (CET 1) of 13.28 per cent which is substantially higher than the regulatory requirements. Post the new equity raise, the capital adequacy will be 15.5 per cent with CET 1 at 15.3 per cent.
The bank will use this capital to power growth and continue investing in liabilities and asset franchise, technology and infrastructure platforms to expand reach and product suite.
IDFC First Bank was founded by the merger of IDFC Bank and Capital First in December 2018. It has 464 bank liability branches, 104 full-service asset branches, 356 ATMs and 652 rural business correspondent centres across the country.
