As per the latest reports, IDFC Bank and Capital First have officially confirmed their merger. This was announced by both the companies at the meetings of the boards of directors that took place on the 13th of December, 2018. The boards have mutually approved this merger as per reports and the merger will take place once all shareholder and regulatory aspects fall in place. IDFC Bank will be offering 139 shares equivalent to every 10 shares of Capital First. IDFC Bank is now willing to make a fresh start after its merger bid failed with the Shriram Group.
Capital First is hence valued at Rs. 9, 278 crore or roughly $1.46 billion as part of this deal and Warburg Pincus, the noted private equity organization owns more than 1/3rd of this company. The share price stands at Rs. 938.25 for every share at Capital First. The closing price for Capital First last Friday was Rs. 837.50. The market cap was thus equal to around Rs. 8, 300 crore as per reports. The combined organization will have total AUM (assets under management) of a staggering Rs. 88, 000 crore along with profit after tax (PAT) touching Rs. 1, 268 crore in tandem with a total distribution network spanning194 branches (till December, 2017) and more than 9, 100 micro-ATMs while the BC outlet count will touch 353. The combined entity will also be catering to 5 million+ customers in the country.
IDFC Bank has already issued its statement regarding the matter and will be focusing more on the retail segment in order to smoothly transition towards being a fully diversified bank from a dedicated financial services solution for only the infrastructure sector. This will be in sync with the known goals and business strategy at Capital First for transitioning into a large bank. The retail lending franchise of Capital First comes with Rs. 22, 974 crore in the loan book till September, 2017 and 3 million customers who are active in tandem a distribution network covering 228 locations in India. There is growth of at least 27% approximately in terms of AUM (5-year CAGR) and profit growth is also around 40%. The net and gross NPA volume is at 1% and 1.63% respectively as well.
The present Chairman & Managing Director at Capital First, V Vaidyanathan, will be the CEO & Managing Director of the combined organization, succeeding Dr. Rajiv Lall. Dr. Lall, the CEO & Founding Managing Director at IDFC Bank from 2015-present, will become the non-executive Chairman at IDFC Bank subject to receiving the regulatory go-ahead. He will succeed Veena Mankar who will continue to be on the Board. Dr. Lall will be playing a vital role in the entire transition as per reports.