IDFC First Bank

IDFC FIRST Bank is an Indian private sector bank formed by the merger of the banking arm of Infrastructure Development Finance Company and Capital First, an Indian non-bank financial institution.

History
IDFC Limited was set up in 1997 to finance infrastructure projects in India. With time, the company diversified into asset management, institutional broking and investment banking. In 2014, the Reserve Bank of India granted in-principle approval to IDFC Limited to set up a new bank in the private sector. Following this, the IDFC Limited divested its infrastructure finance assets and liabilities to a new entity - IDFC Bank. The bank was launched through this demerger from IDFC Limited, and it was officially inaugurated by Prime Minister of India Narendra Modi in October 2015.

IDFC Bank started operations on 1 October 2015, with 23 branches in Madhya Pradesh, Delhi, Mumbai, Hyderabad, Bengaluru, Pune, Chennai, Ahmedabad and Kolkata. IDFC Bank launched its 100th branch in Honnali, Karnataka, in October 2017.

In January 2018, IDFC Bank and non-banking financial company Capital First announced a merger. Capital First, then called Future Capital Holdings, went public on India's stock exchanges in 2008. It was an Indian non-bank financial institution providing debt financing to small and medium-sized enterprises. Capital First was founded in 2012 by V. Vaidyanathan who acquired a stake in Future Capital Holdings and secured equity backing of Rs. 8.10 billion from Warburg Pincus. In 2018, Capital First obtained an upgraded long-term credit rating of AAA.

Merger
Post the merger, Vaidyanathan took over as the MD and CEO of the merged entity. The Reserve Bank of India approved his appointment for a period of three years, effective from December 19, 2018. 13.9 shares of IDFC Bank were issued for every share of Capital First as part of the merger scheme.

The parent entity, IDFC Limited, retained the AMC, Institutional Broking, and Infrastructure Debt Fund businesses through IDFC Financial Holding Company Limited (NOFHC).

As of 3 July 2023, the board of the bank had approved the merger with IDFC Limited. Shareholders of the latter will receive 155 shares of IDFC FIRST Bank for every 100 shares they currently own in IDFC Limited, as stated in a filing with the stock exchange. In the mid of October 2023, the bank obtained clearance from the Competition Commission of India for its merger. On 18 December 2023, the RBI issued 'no objection' for the bank to merge with IDFC. But the merger still needs approval from the National Company Law Tribunal.

On 17 May 2024, the NCLT convened via video conferencing to approve the merger proposal between IDFC First Bank and IDFC Limited. The proposal, endorsed by the bank's shareholders and NCD holders, involves two steps: IDFC FHCL merging with IDFC Limited, followed by IDFC Limited merging into IDFC First Bank.

Shareholding
As of September 2023, the promoter holding at the bank is 40.00 the institutional holding is at 24.48, the public holding is at 26.02. But on 22 February 2023, IDFC Limited announced it intention to invest INR 2,200 crores in the bank. This will bring IDFC Limited's current holding in the bank up to 40 percent, from the current level of 36.38 percent.

Also, on 22 February 2023, the bank issued 12,03,745 equity shares to its employees under the company ESOP plan.

On September 12, 2023, US-based GQG Partners acquired an additional 5.1 crore shares, equivalent to a 0.76% stake, from V. Vaidyanathan in a block deal conducted on the stock exchange. As a result, GQG Partners' ownership in the bank rose to 3.36%.

Operations
In October 2023, the National Securities Depository Limited finalized a deal to acquire office space from IDFC First Bank at Naman Chambers in Bandra Kurla Complex. This transaction encompassed 68,000 square feet and amounted to ₹198 crore. This decision was to centralize its operations in proximity to its headquarters located at the IDFC FIRST Bank Tower.

The bank transformed from infrastructure to retail banking in four years since the merger, increasing the CASA ratio from 8.6% to 49.77% (March 31, 2023) and retail deposits from 27% to 76% of total deposits.

As of November 2022, the bank had 809 branches, 249 asset service centres, 925 ATMs, and 606 rural business correspondent centres across the country.

Products and services
The bank provides products and services related to retail banking, wholesale banking and investment banking.

The bank became a member of the Open Network for Digital Commerce in September 2022. Subsequently, it began enrolling small merchants, who are existing customers with current accounts, onto a partner application registered with ONDC.

Environmental, social, and governance

 * IDFC FIRST Bharat Limited (IFBL) originated from Tamil Nadu-based Grama Vidiyal, which was established in 1986 as a Public Charitable Trust. In 2003, it evolved into Grama Vidiyal Micro Finance Limited (GVMFL) with a dual focus on financial inclusion sustainability and on women and family development. In 2016, IDFC Bank acquired GVMFL and renamed it “IDFC Bharat Limited”, operating as a wholly-owned subsidiary of IDFC Bank. Following the merger with Capital First Limited, it became known as IDFC FIRST Bharat Limited.

Financials
The bank achieved a profit after tax (PAT) of ₹2,437 crore in the financial year 2023, maintaining a capital adequacy ratio of 16.82%. The bank's retail loans showing a gross non-performing asset (NPA) ratio of 1.65% and a net NPA ratio of 0.55% as of March 31, 2023. The overall gross NPA ratio is 2.51%, while the net NPA ratio is 0.86%. Excluding the infrastructure sector, which is being phased out, the gross NPA and net NPA ratios are 1.84% and 0.86%, respectively.

Milestones

 * 2003 - The company raised $200 million for the India Development Fund, the first infrastructure-focused private equity fund.
 * 2009 - IDFC signs the UNGC Global Compact.
 * 2010 - Infrastructure Development Finance Corporation (IDFC) has raised ₹2,654 crore by a qualified institutional placement (QIP), attracting demand for twice the shares on offer, according to an advisor to the sale.
 * 2013 - IDFC becomes the first Indian institution to adopt Equator principles.
 * 2014 - RBI grants a banking license to IDFC Bank.
 * 2017 - The bank IDFC Bank is the first in India to launch an Aadhaar-linked cashless merchant solution.
 * 2018 - IDFC Bank merged with Capital First to create IDFC First Bank.
 * 2020 - The bank announced that it has signed Amitabh Bachchan, as its first brand ambassador.
 * 2021 - It announced the entry into the credit card sector with low interest rates and interest free credit in 2021.
 * 2023 - Launches central bank digital currency under the guidance of the RBI.
 * 2023 - The bank secured exclusive sponsorship rights for all Board of Control for Cricket in India's international and domestic home matches. Also, it became the top 10 most valuable publicly traded banks in India, with a market capitalization of Rs 66,386.78 crore.
 * 2023 - Launched a UPI-based digital RuPay credit card.
 * 2024 - Partnered with Infibeam's CCAvenue for country-wide credit card EMI solutions.
 * 2024 - Declared as "Category A" commercial bank as per joint Indian Institute of Technology Bombay-Moneylife Foundation report.

Philanthropy
Under bank’s employee-funded Ghar Ghar Ration program, the bank employees will supply ration kits to 50,000 low income customers whose livelihoods has been impacted by the pandemic. As many as 16,000 beneficiaries have been reached across Rajasthan, Madhya Pradesh, Maharashtra, Odisha, Gujarat, Karnataka, Haryana, Tamil Nadu, Andhra Pradesh, and Chhattisgarh under this program. The lender has also identified 250 vulnerable families who have lost an earning member of their family to COVID-19 with a cash relief support of ₹10,000 in a partnership with 'Give India'.

2019

 * Utkarsh Puraskar’ DigiDhan award - Digital Payments Utsav by Ministry of Electronics and Information Technology.
 * Best Private Bank Award: Distinction in Digital Innovation & Services 2019 - Asian Private Banker.
 * Most Promising New Bank in India 2019, Capital Finance International (CFI).

2021

 * Excellence in Water and Sanitation Financing award Water.org.
 * Most Trusted Brands of India 2021 - CNBC TV18.
 * Best for HNW in India 2021 - Asiamoney.

2022

 * The Financial Express's Best Digital Bank for 2022–23
 * Best Sustainable Banking Strategy India 2022, Capital Finance International (CFI).
 * Best CSR Sustainability Awards for "Shwetdhara" campaign - The Economic Times.

2023

 * Capital Finance International's Outstanding Commitment to ESG Performance (India) for the year 2023