Mumbai: IndusInd Financial institution’s promoter entity, IndusInd Worldwide Holdings Ltd (IIHL), is in preliminary discussions with long-term traders, together with sovereign wealth funds and pension funds, to boost contemporary capital by issuing new shares, in keeping with two senior executives conversant in the matter.
The transfer goals to extend the Hinduja Group entity’s stake within the private-sector financial institution, the 2 executives mentioned. Notably, IndusInd Financial institution is at present grappling with accounting and regulatory crises, in addition to falling share costs.
“IIHL has diversified holdings with almost 583 shareholders,” the primary individual cited above mentioned on situation of anonymity. “Not one of the (present) shareholders are promoting. As a substitute, IIHL is wanting to herald a single world monetary investor.” At present, promoter entities IIHL and IndusInd Ltd collectively maintain 15% stake in IndusInd Financial institution, with IIHL alone holding 12.06% stake as of March 2025.
IIHL has already acquired in-principle approval from the Reserve Financial institution of India (RBI) in March 2023 to extend its stake within the financial institution to 26%, in keeping with a media assertion from the corporate on the time.
“As soon as the ultimate approval comes, the holdco (holding firm) must be prepared with money to purchase the remaining stake,” mentioned a 3rd govt who additionally spoke anonymously, including that the corporate had raised round $100 million by way of a rights concern final 12 months in anticipation of accelerating its stake in IndusInd Financial institution from 15% to twenty%.
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The executives didn’t disclose the sum of money IIHL plans to boost within the present spherical. Nevertheless, they confirmed that other than utilizing a part of it to extend stake within the financial institution, IIHL will even repay some debt incurred throughout its acquisition of Reliance Capital, which concluded earlier this 12 months.
Barclays is participating with potential traders on behalf of the Hindujas to boost the capital, the 2 executives cited earlier mentioned.
An electronic mail despatched to IIHL remained unanswered until press time, and Barclays declined to remark.
The background
IIHL’s choice to extend its stake comes as IndusInd Financial institution navigates a difficult interval marked by an accounting disaster and a major decline in its share worth. In March, the financial institution disclosed discrepancies price ₹2,100 crore in its derivatives portfolio as of December 2024, prompting an inside overview and a forensic audit. This was followed by the resignations of its chief govt officer (CEO) Sumanth Kathpali and deputy CEO Arun Khurana.
IndusInd Financial institution’s shares have fallen by 9% since 10 March when it disclosed the discrepancies.
IIHL chairman Ashok Hinduja had indicated on the time that rising the stake was into consideration following the financial institution’s inventory efficiency. “That is an opportune time as a promoter to extend stake,” Hinduja acknowledged on the sidelines of a press convention after finishing the acquisition of Reliance Capital in March.
Established in 1993 for the aim of buying a banking licence, IIHL is a intently held firm with almost 583 shareholders, primarily non-resident Indians (NRIs) who got here collectively to set it up. The entity generates its earnings primarily from dividends acquired from IndusInd Financial institution.
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Over the previous six years, IIHL has raised capital by way of a number of rights points. Its paid-up capital stood at $42 billion and net-worth at $2.5 billion, in keeping with the third govt cited earlier. Following the autumn in IndusInd Financial institution’s share worth, IIHL’s ebook worth has been lowered to round $35 billion from an earlier $90 billion.
Individually, IIHL accomplished its acquisition of Reliance Capital in March this 12 months, almost two years after rising because the profitable decision applicant for the non-banking finance firm underneath the insolvency and chapter course of.
The overall deal measurement amounted to ₹9,650 crore, of which the Hindujas raised ₹7,300 crore through debt and the rest by way of fairness, in keeping with the corporate. Barclays Capital and 360One assisted the promoter group in elevating funds by way of high-yielding rupee bonds, in keeping with an individual conversant in the event.
On Monday, IndusInd Financial institution’s share worth fell 0.56% to settle at ₹812.55 on the BSE.
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