Mumbai-based IDFC First Bank is an Indian banking company that forms a part of the integrated infrastructure financing company. Recently, IDFC First Bank’s board of Directors had approved an INR 3,000 crore fundraising plan following which the share prices of the bank rose to as much as 7.4% to hit the highest price of INR 62.40 on the Bombay Stock Exchange.
According to several reports, it has been confirmed that the Board of Directors has passed a resolution giving approval to the company to raise INR 3,000 crore. The reason for the board to approve of the bank’s fund raising strategy is the bank’s solid future plans for the company, considering the effort to initiate the economic recovery in India, as mentioned in a report by NDTV India.
IDFC Bank also commented on the mode of raising funds as it mentions that the bank is in advanced talks to raise funds by issuance of securities, through one or more than one permissible modes of transactions. The permissible mode includes Private Placement, Initial Public Offering, Institutional placements and even maybe a combination of these with respect to the shareholders.
As mentioned in the NDTV Report, it has also been confirmed that the bank has constituted a ‘Capital Raising Committee’ to decide the terms and conditions and monitor the transactions as well.
COVID-19 has been a professional torture for many businesses and especially banks with almost negligible income whatsoever. The bank’s revenue shares surged three-fold since then as it had stooped down to as low as INR 18 during the month of March in 2020.
According to the company profile on Crunchbase, IDFC Bank has raised total funding worth INR 8.4 billion with only one financing round that took place in July 2010.
Usually, the company’s trading sessions on the Bombay Stock Exchange revolves around 30. Lakhs but during the bank’s Friday session, as mentioned in a report by NDTV, the shares exceeded their usual trading volume from around 30 lakhs to 41 lakhs.
Furthermore, talking about the investments of the bank, IDFC First Bank has invested in Federal Transport Private Limited, Reliance Jio, Suryoday- a small financing bank and Teamlease Services.
Thus, the Board meeting of the IDFC bank was meant to discuss various growth opportunities for the bank based on its capabilities. The bank aims to serve and restore the economic balance of the country after the COVID-19 pandemic. Therefore, in final statements, the members of the board meeting approved INR 3,000 fundraise in either one go or in tranches that will enable the bank’s expansion plans.