Jan 13: Mumbai-based private sector lender IDFC Bank and global private equity (PE) major Warburg Pincus-backed Capital First Ltd on Saturday announced that the Boards of Directors of IDFC Bank and Capital First at their respective meetings held on January 13, 2018, approved a merger of both the companies.
Pursuant to the merger which is subject to regulatory and shareholder approvals, IDFC Bank will issue 139 shares for every 10 shares of Capital First.
“This announcement is pursuant to IDFC Bank’s stated strategy of ‘retailising’ its business to complete their transformation from a dedicated infrastructure financier to a well-diversified universal bank, and in line with Capital First’s stated intention and strategy to convert to a universal bank,” the bank said in a statement.
Capital First brings with it a retail lending franchise with a loan book of Rs 22,974 crores (September 2017), a live customer base of three million customers; and a distribution network in 228 locations across the country growing at a five-year CAGR of 27% on AUM and 40% in profits, with gross and net NPA at 1.63% and 1.0% respectively.
Post-merger, the combined entity of IDFC Bank and Capital First will have an AUM of Rs 88,000 crore, PAT of Rs 1,268 crore (FY 17) and a distribution network comprising 194 branches (as per branch count of December 2017 of both entities), 353 dedicated BC outlets and over 9,100 micro ATM points, serving more than five million customers across the country.
Vaidyanathan, currently Chairman and MD of Capital First, will succeed Rajiv Lall as MD and CEO of the combined entity upon completion of the merger and necessary regulatory approvals.