IDFC First Bank on Friday announced plans to raise as much as ₹2,000 crore through preferential allotment of shares to five investors as well as an increase in its authorised capital.
“New capital infusion will strengthen the bank’s capital adequacy to 15.5 per cent with CET 1 ratio at 15.3 per cent. This will enable the bank to accelerate the growth of its deposit and asset franchise, and better serve its customers through the expansion of business,” it said in a statement.
The bank had a CET 1 of 13.28 per cent at December 31, 2019, which is above the regulatory requirement.
“The Board of Directors at its meeting has approved the …issue of shares on Preferential Basis Issue, offer and allot 86.24 crore equity shares of the face value of ₹10 each fully paid up,” the lender said in a regulatory filing after a meeting of its board of directors.
The share will be allotted on preferential basis, to five proposed allottees at ₹23.19 apiece, which will result in total amount to ₹2,000 crore, it further said.
In this way, the Bank will raise fresh equity capital (qualifying for CET1) of ₹800 crore from IDFC Financial Holding Company Ltd, ₹600 crore from ICICI Prudential Life Insurance and ₹200 crore each from Dayside Investment (Warburg Pincus group HDFC Life Insurance and Bajaj Allianz Life Insurance.
While promoter IDFC Financial Holding Committee will receive 34.39 crore shares, ICICI Prudential Life Insurance will be allotted 25.87 crore shares. Warburg Pincus affiliate Dayside Investment, HDFC Life Insurance and Bajaj Allianz Life Insurance will each be allotted 8.62 crore shares.
“The new capital with strong Capital Adequacy will enable us to continue to power up growth in the chosen areas. It also empowers us to navigate current market uncertainties from a position of strength,” said V Vaidyanathan, Managing Director and CEO, IDFC First Bank.
“The total number of paid-up equity shares of the bank will be 567,23,43,720 post the issue. The networth of the bank post the issue and as added to the networth as of December 31, 2019 will be ₹17,240 crore,” IDFC Bank said.
“In accordance with SEBI ICDR Regulations, the proposed preferential issue to the Qualified Institutional Buyers, will be completed within a period of 15 days from the date of passing the resolution by the shareholders,” it further said.