IDFC First Bank S&P rating has been assigned at BBB- for the long term and A-3 for the short term, with a stable outlook on the long-term rating, the lender said in a BSE filing on August 13, 2026. The bank described the assessment as an investment-grade rating under S&P Global Ratings' international scale.

S&P said the stable outlook reflects its view that IDFC First Bank will maintain financial strength over the next two years. It expects the bank's risk-adjusted capital ratio to remain above 10%, while risks to asset quality should stay manageable and funding should continue to benefit from a granular retail deposit base.

Capital, growth and profitability forecasts

S&P expects IDFC First Bank's RAC ratio to remain at 10.0%-10.5% over the next 18-24 months, against 10.9% as of March 2026. It forecasts annual loan-book growth of 20% during that period and expects additional capital raising of up to Rs 75 billion in fiscal 2027, alongside further equity infusions as required to support growth.

  • Net interest margin is forecast to improve by 5-10 basis points in fiscal 2027 and then stabilise.
  • The cost-to-income ratio could decline to 65%-70% over the next two years from 75% in fiscal 2026.
  • Non-performing loans are expected to remain within 1.7%-1.8% of total loans.
  • Credit costs are forecast at 1.5%-1.6% of total loans over the next two years.

The rating agency said adequate underwriting standards, digital capabilities and improving profitability support the bank's creditworthiness, while its modest market share tempers these strengths.

Retail deposits support funding profile

S&P noted that the bank has shifted from wholesale-dependent funding to a retail-led deposit franchise since the 2018 merger of IDFC Bank and Capital First. At March 31, 2026, core deposits represented about 89% of total funding, while retail deposits comprised nearly 80% of total deposits.

The bank's CASA ratio stood at 50.8% on June 30, 2026. Its top 20 depositors accounted for 9.4% of deposits at March 31, 2026, while the customer loan-to-deposit ratio was about 95% at June 30, 2026.

S&P said it could lower the rating by one notch if the RAC ratio stays below 10% or asset quality deteriorates materially. An upgrade could follow if the bank's profitable market share improves to levels comparable with larger Indian banks. The filing did not announce any dividend or related record date.

Source: BSE corporate announcement.