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IndusInd Bank’s promoter to raise up to $1.5bn

July 04, 2023

IndusInd Bank’s promoter to raise up to $1.5bn
IndusInd International Holdings Limited (IIHL), the promoter of IndusInd Bank Ltd, on Monday said its board approved raising up to $1.5 billion to increase its shareholding in the lender to 26% from the current 15% and fund Reliance Capital acquisition.

Chairman of IIHL, Ashok P Hinduja, said: “This strategic decision opens boundless opportunities to expand IIHL’s business horizon in India and other global geographies, in the BFSI sector. IIHL’s aspirations will not be capital constrained as raising capital for IIHL is not an issue at all.”
 
“The Board also approved the capital raising of up to $1.5 billion to meet its twin strategic objectives,” said IIHL in a press release.
 
The first objective of the capital raising is to increase its promoter shareholding in IndusInd Bank from the current 15% to the proposed 26%. In terms of RBI guidelines on ‘Acquisition and Holding of shares or voting rights in Banking Companies’, the promoters of IndusInd Bank Limited (‘IBL’) are eligible to increase their shareholding in IndusInd Bank from the current level of 15% to 26% by following the procedure laid down subject to the assessment of ‘fit and proper’ status by RBI. Accordingly, the Board of Directors of IIHL have resolved to undertake capital raise in a phased manner to mobilize the required funds for infusion.
 
The second objective of the capital raising is towards equity participation for the Reliance Capital acquisition. On Monday, the Administrator has issued the duly signed Letter of Intent. IIHL was the sole Resolution Applicant with a bid amount of $1.2 Bn (₹9,650 crore) in the process run under IBC for Reliance Capital Limited. The underlying operating companies in Reliance Capital are in Insurance (Life, General and Health), Asset Reconstruction, Broking, etc and augur well to meet IIHL’s aspirations in the BFSI sector.
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