IDFC Bank, Capital First announce merger, get board approval
By Express News Service | Published: 14th January 2018 12:23 AM |
MUMBAI: Months after calling off the merger with Shriram Group, IDFC Bank found its match in Capital First to strengthen its base in banking business.
On Saturday, IDFC said it will merge with Warburg Pinucs-backed Capital First in an all-share deal, while Capital First’s Chairman V Vaidyanathan will take over reins as the merged entity’s MD and CEO succeeding IDFC’s Rajiv Lall. The combined entity will have a diversified portfolio across corporate lending, SMEs and retail loans.
“This announcement is pursuant to IDFC Bank’s stated strategy of ‘retailising’ its business to complete its transition from a dedicated infrastructure financier to a well-diversified universal bank, and in line with Capital First’s stated intention and strategy to convert to a universal bank,” IDFC said in a statement, adding that it will issue 139 shares for every 10 shares of Capital First.
Rajiv Lall, currently the CEO of IDFC Bank, will move into the role of an executive chairman, replacing Veena Mankar, who will continue on the bank’s board. The board also appointed Bipin Gemani as interim chief financial officer of IDFC Bank. Gemani was previously the CFO of IDFC Ltd. The proposed merger, subject to regulatory and shareholder approvals, will together have assets under management of `880 billion, serving over 5 million customers across India. The combined entity will have a profit after tax of Rs 12.7 billion as on FY17, a distribution network of 194 branches, 353 business Correspondent outlets.