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IDFC First Bank launches QIP to raise Rs 3,000 crore with floor price of Rs 94.95

IDFC-First-Bank-launches-QIP-to-raise-Rs-3,000-crore-with-floor-price-of-Rs-94

Private sector lender IDFC First Bank Ltd., in a filing with the exchange, announced the launch of Qualified Institutional Placement on October 3, 2023 to raise funds. As per the circular, “pursuant to the approval accorded by the Board of Directors of the Bank at its meeting held on July 29, 2023, and the special resolution passed by the shareholders of the Bank on August 31, 2023, the Capital Raise and Corporate Restructuring Committee of the Board has, at its meeting held on October 3, 2023, inter alia, passed resolutions approving the floor price for the issue, opening of the issue, i.e., October 3, 2023, and approving and adopting the preliminary placement document.“

IDFC First Bank's committee will meet again on October 6 to determine the issue price of the equity shares to be issued to eligible investors and the number of shares to be allotted to qualified institutional buyers.

IDFC First Bank was reportedly planning to raise Rs 3,000 crore through a QIP. The QIP offering will also include a green shoe option. The floor price is set at Rs 94.95 apiece. According to the sources, the QIP will result in a dilution of 3.3 percent equity at base size and 4.94 percent including the greenshoe option. IDFC First Bank plans to use the proceeds to enhance the capital adequacy requirements and for future business opportunities.

A comment from the MD and CEO of the bank, V. Vaidyanathan, says, “The bank is always thinking of building for the long run. We are not looking at quarters. We are looking ahead into years and decades. The bank has been seeing strong deposit flow".

IDFC First Bank had previously conducted a QIP in 2021, with the issue price at Rs 57.35 per share. During that offering, the bank allocated 52.31 crore equity shares to qualified institutional buyers, raising a total of Rs 3,000 crore.

Last month, US-based investment firm GQG Partners acquired a 2.6 percent stake in the lender for Rs 1,527 crore. As of June 2023, promoters held a 39.9 percent stake in the bank, while DIIs and FIIs owned 20.9 and 11.7 percent, respectively. The public held a 27.5 percent stake in the lender.

Over the past year, IDFC First Bank has shown remarkable performance in comparison with the benchmark index, the stock has rose approximately 72% in past 1 year, compared to 12% in the Nifty 50 index. As the time of reporting, the stock was trading lower at Rs. 91.70.

ANNUAL FY 2023 FY 2022 FY 2021 FY 2020 FY 2019
Total Income 27,195.09 20,345.28 18,221.95 17,962.73 13,142.66
Total Income Growth (%) 33.67 11.65 1.44 36.67 28.62
Provisions & Contingencies 2,511.29 3,151.25 2,100.70 4,813.05 188.8
Provisions & Contingencies Growth (%) -20.31 50.01 -56.35 2,449.29 -44.47
Profit after Tax (PAT) 2,484.93 132.31 483.18 -2,843.39 -1,907.88
PAT Growth (%) 1,778.15 -72.62 - - -296.76
Net Interest Margin (%) 5.26 5.1 4.52 4.03 2.07
Net Profit Margin (%) 10.93 0.77 3.02 -17.5 -15.63

 

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