IDFC First Bank’s board has approved a proposal to raise Rs 3,200 crore through a preferential allotment of shares. 

The private sector lender will allot 39.68 crore shares to marquee investors, including LIC, HDFC Life, Aditya Birla Sun Life, Bajaj Allianz Life, ICICI Lombard and SBI General Insurance.

The fresh equity capital raised from these investors is being done at Rs 80.63 per share.

Post-issue, LIC will have the largest stake in IDFC First Bank at 2.68%, followed by HDFC Life at 1.31% and Aditya Birla Sun Life at 1.06%.

As much as 47% of the proposed issue will be subscribed to by the state-run LIC.

“The bank intends to raise funds of Rs 3,200 crore by issuing equity shares of the bank on a preferential basis. With this proposed capital raise of Rs 3,200 crore, the overall capital adequacy of the bank will further increase to 17.49 per cent, as computed on the risk-weighted assets as of March 31, 2024, which will put the bank in a strong position to participate in future growth,” the lender said in a release.

The bank will utilise this capital for future growth opportunities.

“After our last capital raise of Rs 3,000 crore, 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.