New Delhi: IDFC First Bank has unveiled plans to raise Rs 3,200 crore through a preferential allotment of shares. The private sector lender disclosed that its board has given the green light for the issuance of 39.68 crore shares to prominent investors at a rate of Rs 80.63 per share. This proposed issue price represents a premium of 4.51 percent over the previous closing price of Rs 77.15, as stated in an exchange filing by the bank.
The list of prospective allottees includes entities such as 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. The infusion of capital, according to IDFC First Bank, is earmarked for fueling future growth opportunities while maintaining high asset quality standards.
Explaining the rationale behind the capital raise, a spokesperson for the bank noted that following their previous capital infusion of Rs 3,000 crore, the Reserve Bank of India (RBI) had increased risk weights on consumer credit exposures in November 2023. This adjustment resulted in the consumption of approximately 1 percent of the bank's capital.
Consequently, the current capital raise is being executed prudently, factoring in the new risk weightages, to support the bank's growth trajectory.
Additionally, the bank anticipates a 4.11 percent increase in book value per share (BVPS) post the capital raise, reaching Rs 47.36, based on the financials as of March 31, 2024.
Despite a dip in net profit to Rs 724.35 crore for the quarter ended March 31, compared to Rs 802.62 crore during the same period last year, IDFC First Bank demonstrated robust growth in net interest income (NII), which surged by 24 percent from Rs 3,597 crore in Q4FY23 to Rs 4,469 crore in Q4FY24.
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