LIC raises stake in IDFC First Bank to 2.68% at ₹80.63/share via private placement offer

The Life Insurance Corporation of India (LIC), India's largest insurance company, said on Thursday, July 4, that it acquired a 0.2 per cent stake in IDFC First Bank Limited for ₹80.63 per share, increasing its holding in the private sector lender.

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 Wednesday, July 3, compared with the previous day's close of ₹80.87. 

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.

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. Hence, this capital is being raised prudently for future growth of the Bank while factoring the new risk weightages,” said the bank in the exchange filing on May 30.

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.