IndusInd Bank’s Promoter Plans to Raise ₹12,300 Crore to Increase Stake in the Bank
Shares of IndusInd Bank rose by 1% and reached a fresh 52-week high in early trade on Tuesday following news that Hinduja group firm IndusInd International Holdings Ltd (IIHL), the promoter of the bank, intends to raise $1.5 billion (about ₹12,300 crore) in order to boost its stake in the bank. The raised capital will also be used to finance the proposed acquisition of Reliance Capital. Presently, IIHL holds a 15% share in IndusInd Bank and plans to increase their stake to 26%.
In response to this development, IndusInd Bank’s shares opened higher at ₹1,386.30, compared to the previous closing price of ₹1,379.65 on the BSE. In the first hour of trading, the banking heavyweight surged by as much as 1% to reach a fresh 52-week high of ₹1,393.65, while its market capitalization rose to ₹1.07 lakh crore. Since July 13, 2022, the stock has experienced a 76% increase from its 52-week low of ₹789.75.
IIHL announced in a statement that the company has made a strategic decision to expand its business reach in India and other global geographies within the banking, financial services, and insurance (BFSI) sector. Ashok P. Hinduja, Chairman of IIHL, stated, This strategic decision opens up limitless opportunities for IIHL to broaden its business scope in India and other global geographies within the BFSI sector. Raising capital for IIHL will not be an issue, allowing us to fulfill our aspirations without any constraints.
IndusInd Bank’s promoter’s plan to raise funds and increase its stake in the bank reflects their confidence in the future prospects of the institution. The proposed acquisition of Reliance Capital further signifies their commitment to expanding their presence in the BFSI sector. With the rise in the bank’s share price and market capitalization, it is evident that investors are optimistic about the growth potential of IndusInd Bank.
It will be interesting to monitor the developments surrounding IndusInd Bank and IIHL’s expansion plans. As the banking sector undergoes dynamic changes, the strategic moves made by IndusInd Bank’s promoter may position the institution as a key player in the Indian and global banking industry.
