Shares of IDFC First Bank slipped 3.19% to ₹61.30 in early trade on Wednesday, despite the bank announcing a significant ₹7,500 crore capital raise through a preferential allotment of compulsorily convertible cumulative preference shares (CCPS). The stock had closed at ₹63.32 in the previous session.
Key details of the capital raise
The Board of Directors approved the issuance of 124.99 crore CCPS at ₹60 per share, with a face value of ₹10 and a premium of ₹50.
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Currant Sea Investments B.V. (an affiliate of Warburg Pincus) will subscribe to 81.27 crore CCPS for ₹4,876 crore.
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Platinum Invictus B 2025 RSC Limited will invest ₹2,623 crore in 43.72 crore CCPS.
These preference shares carry an 8% cumulative dividend and are mandatorily convertible into equity shares at a 1:1 ratio within 18 months or earlier, if the stock price sustains above the subscription price.
The capital infusion aligns with the bank’s long-term growth strategy and will further strengthen its capital adequacy and support expansion plans.
Shareholding and governance impact
The bank will amend its Articles of Association to allow Currant Sea Investments to nominate a non-retiring, non-executive director on the Board. It will also initiate a postal ballot to seek shareholder approval for:
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Reclassification of authorised share capital
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CCPS issuance
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Amendment to the Articles of Association
Updated authorised capital structure
The new structure will allow for:
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12.7 billion equity shares of ₹10 each
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1.3 billion preference shares of ₹10 each
Totaling ₹14,000 crore in authorised capital.
Stock performance snapshot (as of 9:26 AM, April 17)
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Current Price: ₹61.30
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Previous Close: ₹63.32
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Day Range: ₹60.92 – ₹63.09
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Market Cap: ₹444.91 billion
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Year Range: ₹52.46 – ₹86.10
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P/E Ratio: 22.87
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Avg Volume: 39.94 million shares
Despite the long-term positives of the capital raise, the stock saw immediate selling pressure, likely due to dilution concerns and broader market sentiment.
