Hinduja Group keen to raise stake in IndusInd Bank to 26%, seeks RBI permission; shares down over 9%
IndusInd Bank shares touched a high of Rs 707.45 in the morning session, but later pared gains to trade at Rs 668.80, up 0.7 percent from their previous close, at 11:42 am on NSE.
London-based Hinduja Group is reportedly keen to raise its stake in IndusInd Bank to 26 percent from the existing 15 percent and has sought the nod of the Reserve Bank of India in this regard, said a news report.
The move by Hinduja Group in the wake of the relaxation granted to Uday Kotak recently and IndusInd International Holding Ltd, the promoting entity, sent a letter to the central bank in this connection, said a report in The Economic Times.
The bank licensing norms of the Reserve Bank of India (RBI) say that a private bank’s promoter needs to pare its holding to 40 percent within three years, 20 percent within 10 years and to 15 percent within 15 years. This has been relaxed for Kotak Mahindra Bank and Bandhan Bank, the report said.
“We have just recently written to the RBI to increase shareholding from 15 percent to 26 percent. When I saw that Kotak Mahindra Bank has got a dispensation, we also thought of writing to them. Why not give us that dispensation as well? Let’s see how they respond,” Ashok Hinduja, Chairman of the Hinduja Group of Companies (India), was quoted as saying in the report.
Meanwhile, the shares of IndusInd Bank jumped 6.5 percent during the intraday trade on Tuesday after a media report said that the promoter Hinduja Group sought the RBI permission to raise its stake in the private lender.
IndusInd Bank shares touched a high of Rs 707.45 in the morning session, but later pared gains to trade at Rs 668.80, up 0.7 percent from their previous close, at 11:42 am on NSE. The stock closed at Rs 603.05, down 9.20 percent.
RBI recently allowed Uday Kotak, promoter of Kotak Mahindra Bank, to hold a 26 percent stake as long as the bank didn’t raise capital from a share sale to outsiders or on a rights basis. However, Kotak’s voting rights were restricted to 15 percent of the capital starting April 2020, reported News18.
Hinduja brothers had set up IndusInd Bank which got a banking licence in 1994.
IndusInd Bank had posted 32 percent rise in net profit to Rs 1,300.20 crore for December quarter, 2019-20.
The bank had registered a profit of Rs 985.03 crore in the year-ago period.
In February this year, ratings agency Moody's Investors Service revised down its outlook on Indusind Bank to 'negative' from 'stable' concerns over a further deterioration in asset quality.
The private sector bank's rating has been affirmed at the earlier one of 'Baa-3/P-3', the agency said in a note.
Baa3 denotes the lowest rating in investment grade on long-term corporate obligation which carries moderate risks.
-- With PTI inputs
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Axis Bank was the top gainer in the Sensex pack, rising around 2%, followed by Bajaj Finance, SBI, Reliance Industries, ONGC and UltraTech Cement
IndusInd Bank was the top loser in the Sensex pack, shedding around 3 per cent, followed by ICICI Bank, Axis Bank and Tech Mahindra
Trading was extended till 5 pm today in both the NSE and BSE after a technical glitch halted trade for over four hours in the national stock exchange