IndusInd International Holdings (IIHL), the promoter of IndusInd Bank, said on Monday that it plans to raise funds in a “phased manner” to increase its stake in the private sector lender from the current 15% to 26%.
The board of IIHL also approved a fund-raise of up to $1.5 billion or approximately Rs 12,300 crore, according to a statement by the company.
The funds are also to be used to complete the acquisition of Reliance Capital. As is known, IIHL was the sole bidder for Reliance Capital, having paid Rs 9,650 crore for the company as part of the resolution process under the IBC (Insolvency and Bankruptcy Code). The acquisition of Reliance Capital would give IIHL a bigger presence in the financial sector across businesses, including life and general insurance, asset reconstruction and broking.
The stock of IndusInd Bank closed at Rs 1,379.65 on Monday on the Bombay Stock Exchange, almost unchanged from Friday’s close. At current price, the promoters would need to infuse approximately Rs 11, 600 crore to take their holding up to 26%.
The company said global sovereign and private equity funds have expressed interest in participating in IIHL’s growth s tory. “The company is likely to be listed by the next year and this would also give its numerous shareholder an option to trade in its shares,” the statement said.
The private sector bank ended FY23 on a strong note with net profits of close to Rs 7,390 crore on a net income of Rs 17,592 crore. The total assets of the lender, at the end of March, stood at Rs 4.41 trillion.
The equity capital of the lender comprises 775.89 million shares of Rs 10 each. The promoters currently hold 117.51 million shares, according to data on the BSE. The free-float market capitalisation is close to Rs 90,000 crore.