CALCULATE YOUR SIP RETURNS

IDFC First Bank Gets Govt Nod to Raise Stake in Niraj Kakkad Constructions Beyond 30%

Written by: Kusum KumariUpdated on: 9 Jul 2025, 2:58 pm IST
IDFC First Bank gets Finance Ministry approval to raise stake above 30% in Niraj Kakkad Constructions, an exception under the Banking Regulation Act.
IDFC First Bank Gets Govt Nod to Raise Stake in Niraj Kakkad Constructions Beyond 30%
ShareShare on 1Share on 2Share on 3Share on 4Share on 5

IDFC First Bank has received permission from the Finance Ministry to raise its shareholding above 30% in Niraj Kakkad Constructions. This was done after recommendations from the Reserve Bank of India (RBI).

Law Typically Restricts Such Ownership

Under Section 19(2) of the Banking Regulation Act, 1949, banks are not allowed to hold more than 30% stake in any company—whether directly or indirectly through pledges, mortgages, or outright ownership. However, the Finance Ministry has now granted an exemption for IDFC First Bank from this rule.

This is not the first time the government has made such an exception. In March 2020, the RBI allowed the State Bank of India (SBI) to exceed the 30% ownership limit to help rescue Yes Bank. SBI’s stake reached around 48% but was later reduced to below 30%.

IDFC First Bank FY25 Performance

According to its latest annual report, IDFC First Bank saw solid business growth in FY25:

  • Deposits rose 25% to ₹2.5 lakh crore.
  • Loans and advances grew 20% to ₹2.4 lakh crore.
  • However, profit after tax fell 48% to ₹1,525 crore, down from ₹2,957 crore in the previous year.

Read More: Pfizer Dividend of ₹165/Share: Ex-Date Today, July 9 – What You’ll Earn for 50 Shares

About IDFC First Bank

IDFC First Bank is a private-sector bank headquartered in Mumbai, India. It was established in 2015 as the banking arm of IDFC Limited. After merging with Capital First in 2018, the bank transitioned from primarily financing infrastructure projects to focusing on retail banking services. In 2024, it completed a reverse merger by acquiring its parent company, IDFC Limited.

As of July 8, 2025, IDFC First Bank share price closed at ₹77.86. 

Conclusion

The Finance Ministry’s approval gives IDFC First Bank flexibility to raise its stake in Niraj Kakkad Constructions beyond legal limits. This move, backed by the RBI, mirrors previous exceptions made for strategic reasons. Despite strong deposit and loan growth, the bank's falling profit suggests the need for careful financial planning ahead.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Jul 9, 2025, 9:25 AM IST

Kusum Kumari

Kusum Kumari is a Content Writer with 4 years of experience in simplifying financial market concepts. Currently crafting insightful content at Angel One, She specialise in breaking down complex topics into easy-to-understand pieces, blending expertise in market fundamentals and technical analysis.

Know More

We're Live on WhatsApp! Join our channel for market insights & updates

Open Free Demat Account!

Join our 3 Cr+ happy customers

+91
Enjoy Zero Brokerage on Equity Delivery
4.4 Cr+DOWNLOADS
Enjoy ₹0 Account Opening Charges

Get the link to download the App

Get it on Google PlayDownload on the App Store
Open Free Demat Account!
Join our 3 Cr+ happy customers