IDFC investors vote against Warburg Pincus board seat

51% of institutional investors opposed the proposal, while 99% of retail investors supported it

- Gopika Gopakumar

In the first such instance of shareholder dissent in a private bank, institutional shareholders of IDFC First Bank have rejected a special resolution to allow a board seat to Currant Sea Investments B.V., an affiliate of global private equity (PE) major Warburg Pincus.

The PE major has agreed to acquire a 9.48% stake in the bank. Despite the rejection, however, industry insiders feel that the board seat will happen in due course.

The outcome of the postal ballot released on Monday showed that the bank received 64.1% of shareholders' approval on a special resolution to amend the articles of association (AoA) to give Currant Sea Investments the right to appoint a non-retiring non-executive director.

Typically, such a special resolution requires 75% of shareholder votes—institutional and retail combined—in favour for the resolution to be passed.

More than 51% of institutional investors, who hold 54.14% stake in the bank (data: BSE) and accounted for over 76% of the total votes polled, voted against the proposal.

Retail shareholders, on the other hand, who hold 45.86% stake in the bank, backed the resolution with 99% of their votes.

To be sure, IDFC First Bank does not have a promoter.