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

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.

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