IDFC FIRST Bank has raised ₹7,500 crore (about $900 million) from Warburg Pincus and the private equity arm of Abu Dhabi Investment Authority. This is one of the biggest private equity investments ever made in an Indian bank.
The transaction, which brings close to $1 billion of foreign capital to India, was structured as a direct deal. “I’m also happy to share that no investment banker was involved in this transaction,” said Vaidyanathan V, Managing Director and CEO of IDFC FIRST Bank. “Typically, raising this kind of capital even through a QIP would cost the Bank Rs 100–125 crore. This was a direct deal, and that’s a big save for the Bank.”
He wrote, “I reached out to prospective PE firms, and two of them agreed to go all the way. Every part of the transaction—identifying investors, pitching the story, unit economics, customer experience, franchise quality, mid, long term strategy, risk factors, path to ROA and ROE, strategic positioning, tech readiness & governance—was done directly with select team members from our side. It felt like going back to startup days!”
This investment comes at an important time for IDFC FIRST Bank, which was created in 2018 when IDFC Bank merged with Capital First.
Vaidyanathan, who started Capital First in 2010 after working at ICICI Bank and Citibank, has been leading the changes and growth of the merged Bank.
“We used the first five years to build the basic platform for the Bank. Our retail deposits have grown from Rs. 10,400 crore to ~Rs. 2 lakh crore today,” he added.
He said the Bank’s operating profit increased from ₹749 crore in the financial year 2019 to ₹6,030 crore in 2024. The Bank also changed from making a loss of ₹1,944 crore in 2019 to making a profit of ₹2,957 crore in 2024.
However, Vaidyanathan acknowledged that FY25 has been challenging. “FY25 has been a bad year- PAT is down 44%, but I requested them to look through this in the short run,” he said. “We explained MFI is a one-off, and is an industry issue. We’re running 24 lines of businesses, some for 15 years, and they are all stable and doing well.”
The CEO’s pitch to investors focused on the medium-term outlook. “If they look through FY25, then FY26 onwards for many years, we expect to be highly profitable,” he told the private equity firms.
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