LIC Raises Stake in IDFC First Bank

State insurer Life Insurance Corporation of India (LIC) has expanded its stake in IDFC First Bank to 2.68%, purchasing the lender’s shares for ₹80.63 each. The overall acquisition cost is ₹1,500 Crore.

IDFC First Bank to 20.02 crore shares

LIC raised its stake in IDFC First Bank to 20.02 crore shares on a preferential basis from 1.42 crore shares. The public insurer’s investment in the bank stands at 2.68 per cent for a price of Rs.80.63 per share through the private placement offer, dated June 30, issued by IDFC First Bank. IDFC First Bank’s shares closed 0.40 per cent higher at ₹81.19 on July 3, compared with the previous day’s close of ₹80.87.

Private Sector Bank

According to the exchange filing, IDFC First Bank is a private-sector bank with a market value of ₹57,059.68 crore. The private bank disclosed its plans to raise ₹3,200 crore and issue 39.68 crore shares through a preference share allotment in an exchange filing on May 30. LIC’s current stakeholding makes them the largest shareholder in the private bank at 2.68 per cent, followed by HDFC Life Insurance at 1.31 per cent, and Aditya Birla Life Insurance at 1.06 per cent.

Aims of IDFC First Bank

IDFC First Bank aims to use the money raised to focus on high-asset-quality growth opportunities. “After our last capital raise of ₹3,000 crores, the RBI had raised the risk weights on consumer credit exposures in November 2023, which consumed around 1% of the Bank’s capital. IDFC First Bank posted a 9.75 per cent fall in net profit at ₹724.35 crore for the fourth quarter that ended March 31, as compared to ₹802.62 crore the same quarter the previous year.