Preferred Partners: IDFC First & Warburg Pincus Rewrite Investment Terms

Image Source: Private Equity Insights

IDFC First Bank Ltd. has entered into a definitive amendment agreement with Currant Sea Investments B.V., the subsidiary of global private equity giant Warburg Pincus, as part of its ₹7,500 crore money raising strategy. The agreement defines key terms of the preferential allotment of compulsorily convertible cumulative preference shares (CCPS) and governance rights, including representation on the board.

Under the deal, Currant Sea Investments will invest ₹4,876 crore by subscribing for 81.26 crore CCPS at ₹60 per share. These shares will be converted into equity, giving Currant Sea a 9.48% post-conversion shareholding in the bank. The amendment also grants Currant Sea the option to have one non-retiring non-executive director on the bank's board subject to shareholders' and regulators' approval.

Highlights of the Agreement

Investor: Currant Sea Investments B.V. (affiliate of Warburg Pincus)
Investment: ₹4,876 crore via 81.26 crore CCPS
Conversion Terms: 1:1 based on equity shares at ₹60 per share
Governance Rights: Nomination of Board seat under updated Articles of Association

Strategic Impact

Part of IDFC First Bank's ₹7,500 crore fundraise (including ₹2,624 crore from ADIA's Platinum Invictus)
Increases capital adequacy ratio from 16.1% to 18.9
Helps support long-term growth, lending growth, and profitability goals

Sources: IDFC First Bank, CNBC TV18, The Hindu Business Line, ThePrint, Competition Commission of India