Credit Rating- New

IDFCFIRSTBANK/SD/139/2026-27 October 1, 2026 National Stock Exchange of India Limited BSE Limited Mumbai 400 051 Mumbai 400 001 NSE Symbol: IDFCFIRSTB BSE Scrip Code: 539437 Sub.: Disclosure under Regulation 30 of the SEBI (LODR) Regulations, 2015, as amended. Dear Sir, Madam, We wish to inform you that India Ratings and Research (“Ind-Ra”) has: i. affirmed the rating of ‘IND AA+ / Stable’ assigned to the debt instruments of IDFC FIRST Bank Limited (“Bank”), comprising Basel III Tier II Bonds and Infrastructure Bonds, aggregating to ₹ 17,520 crore; and ii. withdrawn the rating and outlook assigned to the matured non-convertible debentures aggregating to ₹ 408 crore, following their full redemption, with no amount outstanding. Further, CARE Ratings Limited (“CareEdge Ratings”) has re-affirmed the ‘CARE AA+ / Stable’ rating assigned to the Bank’s long-term bank facilities aggregating to ₹ 692.38 crore and long-term debt instruments aggregating to ₹ 248.10 crore. The rating rationales issued by Ind-Ra and CareEdge Ratings are enclosed. Kindly take the above on record. Thanking you, Yours faithfully, For IDFC FIRST Bank Limited Satish Gaikwad General Counsel and Company Secretary Encl.: As above IDFC FIRST Bank Limited Corporate Office: IDFC FIRST Bank Tower, (The Square), C-61, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051, Maharashtra. Tel: +91 22 7132 5500 Registered Office: KRM Tower, 7th Floor, No. 1, Harrington Road, Chetpet, Chennai 600 031, Tamil Nadu. Tel: +91 44 4571 6477 CIN: L65110TN2014PLC097792 | E-mail: bank.info@idfcfirstbank.com; | Website: www.idfcfirst.bank.in India Ratings &Researdi P. Fttch Grouci Comoon~ India Ratings Affirms IDFC FIRST Bank' Bonds and Tier 2 Debt at 'IND AA+'/Stable, Withdraws NCD Rating Sep 30, 2026 1 IDFC FIRST BANK LIMITED (formerly IDFC Bank Limited) I Private Sector Bank India Ratings and Research (Ind-Ra) has affirmed IDFC FIRST Bank Limited's (IDFCFB) debt instruments as follows: Details of Instruments Size of Rating assigned Regulator of Date of Coupon Maturity Instrument Type Issue {INR along with Rating Action Instrument Issuance Rate{%) Date billion) Outlook/Watch Infrastructure SEBI - - - 95.2 IND AA+/Stable Affirmed bonds# Basel 111 Tier 2 Refer ISIN - - - 80 IND AA+/Stable Affirmed debt* annexure Non-convertible Refer ISIN - - - 4.08 WD Withdrawn debentures* annexure *Details in Annexure #unutilised Analytical Approach Ind-Ra continues to take a standalone view of IDFCFB to arrive at the ratings. Detailed Rationale of the Rating Action The ratings reflect IDFCFB's continued franchise expansion, its experienced management, stable liability franchise, diversified product portfolio, and stable capital buffers. The ratings, however, remain constrained by higher operating expenditure and credit costs, which have been impacting the bank's internal accruals that remain on the lower side compared to higher or similar rated peers. List of Key Rating Drivers Strengths • Sizeable retail franchise with diversified product lines • Sizable retailisation of funding profile • Adequate capital buffers Weaknesses • Operating expense remains drag on internal accruals • Asset quality needs to be monitored Detailed Description of Key Rating Drivers Sizeable Retail Franchise with Diversified Product Lines: IDFCFB's retail, agri and micro, small and medium enterprises (MSME) book accounted for 79% of the total funded exposure in 1QFY27. The bank intends to continue focusing on maintaining the current mix of its overall loan portfolio, with sustained focus on retail and MSME loans, thereby driving its granular loan portfolio. This increased retailisation has helped the bank maintain its margins, considering its cost of funds are higher, though declining, than that of its larger peers. IDFCFB's net interest margin (NIM) improved to 5.96% in 1QFY27 (1QFY26: 5.71%), supported by a moderation in its cost of funds and an improvement in better yielding asset mix. The share of microfinance (MFI) loans moderated in overall book and the bank has availed credit guarantee funds for micro units (CGFMU) cover for all its incremental MFI loan disbursals since January 2024 and reached 93% coverage level of the MFI loan book as of June 2026. Also, the bank recovered INR5.1billion in 1QFY27 against which the bank has created contingent provision. Further recoveries are expected over FY27-FY28 as per management. The bank witnessed substantial growth in the corporate segment, largely in the emerging corporates and financial institutions segment, and this is likely to continue in the medium term, supported by the bank's strategy. Sizable Retailisation for Funding Profile: IDFCFB's top 20 deposits-to-total deposits increased to 9.39% in FY26 (FY25: 7.95%) but remains in line with peers. The bank has mobilised decent deposit in recent RBI window on foreign currency non-resident deposit (FCNR) deposit which would be utilised incrementally to retire wholesale debt, fund growth and help in liquidity coverage ratio (LCR) maintenance, thereby supporting NIM. The current account saving account (CASA) ratio remained largely stable at 50.8% in 1QFY27 (FY26: 49.8%). In 1QFY26, the bank's CASA deposits accounted for 44.9%% (FY26: 44.3%; FY25: 40.6%) of the total liabilities (deposits + borrowing) and it has been on an improving trend compared to the industry. However, its costs remained higher than that of its larger rated peers. As part of its strategy, the bank plans to maintain its higher saving rate until there is a moderation in the share of borrowings in the overall funding and bank attains significant operating leverage benefits, post which there could be a reduction in the peak saving rate, providing a benefit. Adequate Capital Buffers: Although IDFCFB's capital buffers improved following its capital raise in 2QFY26, capital absorption remained high as business growth exceeded internal accruals, leading to a moderation in common equity tier-1 (CET1) ratio to 13.3% (FY26: 13. 7%; FY25: 13.2% ). The bank has shown ability to raise capital at frequent intervals; this would continue to aid its growth until internal capital generation exceeds loan growth. However, given that its guided growth remained higher than internal accruals, the bank is likely to require a capital raise in FY28 to maintain adequate capital buffers above regulatory minimum requirements, in line with similarly rated peers. Operating Expense Remains Drag on Internal Accruals: Despite the scaling up of its loan book, IDFCB's return ratios remain subdued due to higher operating expense. The return on assets increased to 1.06% in 1Q FY27 (FY26: 0.4%; FY25: 0.5%), supported by treasury gain and tax refund and growth of 20.6% yoy in funded assets. IDFCFB's cost-to-income ratio (1 QFY27: 69.2%; FY26: 75.2%) remained higher than its peers, despite the bank substantially reducing its operating expenses while continuing to invest for branch expansion, addition of manpower across product lines, and technology. Also, SMA 1 and SMA 2 as a percentage of retail, agri and MSME loans reduced to 0.77% in 1Q FY27 (FY26: 1.07%). Ind-Ra expects the improvement in internal accruals in the medium term to be driven by higher income growth relative to operating expense growth, thereby leading to an improvement in cost-to-income ratio and control and moderation in the overall credit cost from its historical trend, which remains a rating monitorable. Asset Quality Needs to be Monitored: IDFCFB's overall gross non-performing assets (NPAs) improved in the past four quarters to 1.51% in 1QFY27 (FY26: 1.61%; FY25: 1.87%), with the provision coverage ratio remaining steady at 71.5% (70.5%; 72.3%). The annualised credit cost of average funded assets remained at 153bp for 1QFY27 (FY26: 213bp; FY25: 246bp). Although credit costs remained higher than its peers, due to their higher share of unsecured book, which accounted for 39.7% of total advances in in FY26 (FY25: 40.5%), they have been moderat [Showing first 8,000 characters — download PDF for full document]