IDFC, Capital First $1.5 billion merger deal gets approval from CCI

The Competition Commission of India has approved the merger deal between Capital First Ltd and IDFC Bank.
"The whole process will take about six to nine months to start operating," said V Vaidyanathan, the executive chairman of Capital First here.
The two companies in separate regulatory filings to stock exchange BSE said that the CCI in its meeting on March considered and approved the proposed combination.
A fast-growing provider of loans to consumers and small businesses backed by buyout firm Warburg Pincus, Capital First is being acquired by IDFC for $1.5 billion.
The scheme remains subject to the approval from the Reserve Bank of India and other statutory and regulatory approvals, the two companies said.
The two companies in January this year announced a merger deal under which IDFC Bank will issue 139 shares for every 10 shares of Capital First.
Capital First will bring along with large retail network into infrastructure lender IDFC Bank, the Capital First chairman said.
Capital First's market value has grown 10-fold in the five years since it rebranded. It has grown a $3.5 billion loan book extending small sums to entrepreneurs.

IDFC Bank to merge with Capital First, Vaidyanathan to succeed Lall

IDFC Bank will merge with Warburg Pincus-backed Capital First in an all-share deal, and V Vaidyanathan, the current chairman of Capital First, will become the MD and CEO of the merged entity, succeeding Rajiv Lall.'
IDFC Bank will be issuing 139 shares for every 10 shares of Capital First, the bank said in a statement.
The merger is subject to regulatory and shareholder approvals.
Post-merger, the combined entity of IDFC Bank and Capital First will have assets under management of Rs 880 billion and will serve more than five million customers across the country, the bank said in a statement.
The profit after tax of the merged entity would have been Rs 12.7 billion, as on the end of fiscal 2017, and a distribution network of 194 branches (as per branch count of December 2017 of both entities), 353 dedicated business correspondent outlets and over 9,100 micro ATM points, serving more than five million customers across the country.
“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,” the statement said.
Capital First’s retail loan book as on September 2017 was worth Rs 229.7 billion, with a customer base of three million customers; and a distribution network in 228 locations across the country. Capital First has a gross NPA ratio and net NPA ratio of 1.63 per cent, and 1 per cent respectively.