Credit Rating- New

IDFCFIRSTBANK/SD/129/2026-27 August 27, 2026 National Stock Exchange of India Limited BSE Limited Mumbai 400 051 Mumbai 400 001 NSE Symbol: IDFCFIRSTB BSE Scrip Code: 539437 Sub.: Intimation of Credit Ratings pursuant to Regulation 30 of the SEBI (LODR) Regulations, 2015 Dear Sir/ Madam, We wish to inform you that S&P Global Ratings has assigned a 'BBB-' long-term issue rating to the Bank’s US$350 million 5-year Senior Notes priced on August 24, 2026. The issue rating is consistent with the Bank’s ‘BBB-/Stable/A- 3’ issuer credit rating (Investment Grade), which was disclosed by the Bank on August 13, 2026. The S&P Global Ratings publication can be accessed at: https://www.spglobal.com/ratings/en/regulatory/article/-/view/sourceId/101703447 In addition, CareEdge Global Ratings (“CareEdge”) has assigned a ‘CareEdge BBB-/Positive’ long-term foreign currency issuer rating (Investment Grade) to IDFC FIRST Bank Limited. Further, CareEdge has also assigned the same rating to the Bank's USD 600 million 3-year Senior Notes priced on August 18, 2026 and August 19, 2026. The rating rationale issued by the CareEdge is enclosed herewith. You are requested to kindly take the same on record. Yours faithfully, For IDFC FIRST Bank Limited Satish Gaikwad General Counsel and Company Secretary 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 Rating Rationale August 26, 2026 ‘CareEdge BBB-/Positive’ rating assigned to IDFC First Bank Limited Long-term foreign currency issuer rating CareEdge BBB-/Positive USD 600 million senior unsecured notes CareEdge BBB-/Positive CareEdge Global Ratings has assigned a ‘CareEdge BBB-/Positive’ long-term foreign currency issuer rating to IDFC First Bank Limited (IDFC First Bank). It has also assigned the same rating to the bank's USD 600 million senior unsecured notes issue. Rating rationale The rating assigned to IDFC First Bank reflects its comfortable capitalisation profile, strong and granular retail deposit base, and a well-diversified loan book that has undergone a change since the merger of IDFC Bank Ltd and Capital First Ltd in December 2018. It has successfully pivoted from a predominantly infrastructure and wholesale-focused lender into a universal bank offering a full suite of retail as well as wholesale products. The bank focuses on the RAM segment – retail, agriculture and micro, small and medium enterprises (MSMEs) – comprising ~80% of advances. This has resulted in improved granularity of the loan book, low concentration risk and higher net interest margin (NIM) resulting from a well-diversified loan book across the yield spectrum. The rating is further supported by the bank's demonstrated ability to access capital markets and attract marquee institutional investors. Since FY21, the bank has raised over Rs 200 billion of equity, including Rs 75 billion from an affiliate entity of Warburg Pincus LLP and a wholly owned subsidiary of private equity arm of Abu Dhabi Investment Authority (ADIA) in FY26, supporting growth while maintaining a comfortable capital adequacy ratio (CAR) of 15.6% as of March 31, 2026. The funding profile has strengthened materially within a decade of its operations, with customer deposits growing to ~Rs 3 trillion. The bank’s current account savings account (CASA) ratio remained healthy at 48-50%, among the highest in the Indian banking sector. The bank's liquidity profile is also comfortable, supported by a healthy liquidity coverage ratio (LCR), sizeable high-quality liquid assets, and access to multiple systemic liquidity channels provided by the Reserve Bank of India (RBI). The rating is, however, constrained by the bank's modest profitability metrics relative to other private sector banks, largely owing to its elevated operating expenses (opex) associated with franchise building, continued investments in distribution and technology platforms, and recent uptick in credit costs owing to stress in microfinance segment. While the return on assets (RoA) improved to 1.06% in Q1FY27, with the microfinance industry crisis largely over and core cost to income ratio improving, sustenance of profitability level is a key monitorable. Rating Rationale August 26, 2026 Improvement in profitability hinges on lowering its cost-to-income ratio (73.5% in FY26, improved to 70.7% in Q1FY27). The ratio is expected to improve to 65-70% over the next two fiscals as newer businesses (credit cards) and branches generate higher returns as the businesses scale up, providing operating leverage. The asset quality has improved over the past five years, and gross non-performing assets (GNPAs) was at 1.5% as of June 30, 2026, improving from 1.9% as of March 31, 2025, and 1.6% as of March 31, 2026. Fresh slippages reduced to 3.7% in FY26 (PY: 4.2%) from 7.6% in FY22, with prudent underwriting and gradual abating of macro level stress. In Q1FY27, the slippage ratio further improved to 2.5%. Notably, the performance of bank’s unsecured retail and microfinance segments impacting the asset quality and profitability, remain important from a credit perspective. Outlook The positive outlook reflects CareEdge Global's expectation that IDFC First Bank will continue to increase its scale through sustained growth in deposits and advances and gradually improve profitability through operating leverage and expected moderation in opex and credit costs. Rating sensitivity factors Upward factors • Sustained improvement in scale and profitability with RoA exceeding 1.2% • Meaningful reduction in operating expenses and moderation in credit costs resulting in stronger earnings profile • Continued strengthening of the bank's franchise while maintaining robust capitalisation and asset quality metrics Downward factors • Erosion in profitability due to high credit costs, narrowing spreads, or weakening business fundamentals resulting in RoA less than 0.8-1.0% on a sustained basis • Significant deterioration in asset quality resulting in sustained GNPA above 2% • Material weakening in capitalisation leading to leverage exceeding 9x Analytical approach CareEdge Global has evaluated IDFC First's business and financial risk profile on a consolidated basis, including its subsidiary IDFC First Bharat Limited, considering the strong operational, financial, and brand integration between the entities. The rating has been assigned in accordance with CareEdge Global's ‘Financial Institutions Rating Methodology’. Key rating drivers Strengths Growing retail-focused franchise with diversified products IDFC First Bank witnessed a business transformation following the merger of IDFC Bank Ltd and Capital First Ltd in December 2018. It pivoted from a largely infrastructure and wholesale lending institution towards a diversified retail banking model. As of March 31, 2026, the RAM segment accounted for 80% of total advances compared with a wholesale-heavy portfolio prior to the merger (86% wholesale book). Rating Rationale August 26, 2026 The bank's gross funded advances increased to Rs 2.9 trillion as of March 31, 2026, from Rs 1.2 trillion as of March 31, 2021, growing at a compound annual growth rate (CAGR) of ~20%. Growth has been broad-based across mortgages, consumer loans, vehicle finance, MSME lending, rural finance, credit cards, education loans, and other retail product categories. The retail portfolio is highly diversified, reducing concentration risks associated with large-ticket corporate lending. Management’s intention of growing the wholesale portfolio is being pursued with a more conservative underwriting framework and greater focus on relationship-led corporate banking rather than infrastructure fi [Showing first 8,000 characters — download PDF for full document]