IndusInd Bank promoters get 1 month extension to infuse remaining capital

By: |
December 16, 2020 10:26 PM

IndusInd Bank had issued convertible warrants to its promoters--IndusInd International Holdings ltd (IIHL) and its subsidiary IndusInd Ltd (IL) on July 6, 2019

IndusInd BankIndusInd Bank shares closed 0.23 per cent down at Rs 924.50 apiece on BSE.

Private lender IndusInd Bank on Wednesday said Sebi has granted one-month extension for its promoters to infuse residual capital in lieu of conversion of warrants, issued to them last year, worth over Rs 2,695 crore into equity. IndusInd Bank had issued convertible warrants to its promoters–IndusInd International Holdings ltd (IIHL) and its subsidiary IndusInd Ltd (IL) on July 6, 2019 under the composite scheme of arrangement for a total amount of Rs 2,695.26 crore for 1,57,70,985 share warrants.

The promoters had paid Rs 673.82 crore towards warrant subscription for price — 25 per cent of the warrant price of Rs 1,709 per share. “An amount of Rs 2,021.44 crore was to fall due on January 5, 2021, for conversion of warrants into equity shares,” the bank said.
In view of the present uncertain times due to disruption caused by the COVID-19 pandemic, the bank had, at the request of IIHL and IL, approached Sebi for extension in time for payment of balance amount, it added.

“Sebi has granted extension of one month for subscription to the warrants, i.e., until February 4, 2021 to complete the said conversion into equity,” IndusInd Bank said in the filing.

The promoters in a letter to the bank have reiterated their commitment to the subscription to balance amount of warrants to complete the conversion into equity, the bank said in a separate filing. The promoters have proven track record to have stood by the bank since its inception, especially capital infusion in difficult times, the letter stated.

The promoters subscribed to convertible warrants at a price of Rs 1,709 per share when the market was hovering at Rs 1,470 per share, the letter said.

“In the backdrop of COVID-19 pandemic, which disrupted business operations of entities across the world. Amongst many measures to safeguard the economy, RBI also extended moratorium. It’s in this background we requested to seek extension from Sebi for payment of balance amount of warrants, as acceded by them,” the promoters stated in the letter.

The promoters would like to reiterate their confidence in the management and strength of the bank, and commitment to the subscription to balance amount of warrants conversion to the equity, it said.

IndusInd Bank shares closed 0.23 per cent down at Rs 924.50 apiece on BSE.

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