a war chest of more than a billion dollars, with the aim of expanding its equity in the bank.
According to Ashok Hinduja, the chairman of the Hinduja Group of Companies India, the company’s subsidiary, IndusInd International Holding is seeking to raise the funds required to enhance its stake in IndusInd Bank over the next two to three months. Currently the promoter entity owns 16.54 per cent in the Mumbai-based bank. “We are waiting for the operational guidelines to come in; until then, we won’t be able to infuse capital,” he told the Economic Times. “At this stage, we will need more than $1.1 billion to raise our stake to 26 per cent in IndusInd Bank.”
Adding that the company does not intend to put all the money at one go, Hinduja noted that the process of raising capital will take place in tranches, since the bank’s capital adequacy remains strong at the moment. IndusInd Bank is the currently among the five largest private sector lenders in India, with a market value of about ₹700 billion (US$9.3 billion).
Meanwhile, Hinduja is of the view that the RBI should also consider returning to its original licensing conditions, which would permit IndusInd International Holdings to own a larger share of the commercial banking company. “The initial licence conditions stated that promoters should hold a minimum 40 per cent. At an appropriate time, the regulator should relax rules and allow promoters to hike stakes up to (the levels set in) the initial licensing conditions,” he said. “I am very happy with 26 per cent and looking eagerly toward 40 per cent.”
