IDFC Bank and Capital First confirm merger

Finally, the much-awaited merger of IDFC Bank, albeit with its new partner Capital First is confirmed by the bank. The bank on Saturday announced the merger through a filing to the bourses. The news confirming the merger brings great relief to the investors of IDFC Bank, after the unsuccessful merger talks with Shriram Capital, which were called-off after the two entities could not agree on the swap ratio.

IDFC Bank-Capital First merger will form a combined entity with an AUM of Rs, 88,000 crore and 5 million customers supported by 194 branches, 353 business centres and over 9,100 micro ATM points. Post-merger, IDFC Bank will gain diversity in its customer base, while Capital First will convert to a universal bank. 

The swap ratio agreed upon is 139 shares of IDFC Bank for every 10 shares of Capital First, subject to regulatory and shareholder approvals.

Capital First, which primarily lends to retail and SMEs had a loan book of Rs. 22,974 crores as of September 2017, with gross and net NPA at 1.63 per cent and 1.0 per cent, respectively. Warburg Pincus owns 36 stakes in Capital First.