May 29, 2024

IndusInd bank’s promoter, IIHL approves capital raising of USD1.5 bln

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Chairman of IIHL, Mr Ashok P. Hinduja
Chairman of IIHL, Mr Ashok P. Hinduja

IndusInd International Holdings Limited (IIHL), the promoter of IndusInd Bank with a large shareholder base in the UAE,  took the strategic decision to expand its business horizon in India and other global geographies, in the BFSI sector.

Chairman of IIHL, Mr 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”.

IIHL logo
IIHL logo

The Board also approved the capital raising of up to USD 1.5 billion to meet its twin strategic objectives.  The capital raise will pave the way for more acquisitions across geographies, including in the GCC countries with particular focus on the UAE.

“We are open to opportunities in the UAE to grow our BFSI presence with the country’s strong economic growth catalysing business potential,” said Mr. Ashok Hinduja.

The first objective of the capital raising is to increase its promoter shareholding in IndusInd Bank from the current 15 percent to the proposed 26 percent. 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 percent to 26 percent 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.

IndusInd bank's promoter, IIHL approves capital raising of USD1.5 bln
IndusInd bank’s promoter, IIHL approves capital raising of USD1.5 bln

The second objective of the capital raising is towards equity participation for the Reliance Capital acquisition. Today, the Administrator has issued the duly signed Letter of Intent. As reported earlier, IIHL was the sole Resolution Applicant with a bid amount of USD 1.2 bln (INR 9,650 crores) in the process run under IBC for Reliance Capital Limited. Needless to mention, 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.

Global Sovereign/ Private Equity funds have expressed interest in participating in IIHL’s growth story. The Company is likely to be listed by the next year and this would also give a trading option to its numerous shareholders who have stayed with the company for over 3 decades.

IIHL recently acquired a majority holding in a bank in the Commonwealth of The Bahamas and has also received an in-principle approval for a banking license in Mauritius thereby exploring options to set up a Greenfield Bank or consider inorganic acquisition. The Company is in process to acquire Asset Management and Wealth Management businesses in order to complete its BFSI (para banking) suite.  

IIHL Board celebrating its 30 years of investment in Banking has recommended a special interim dividend at the rate of 10 percent to reward its shareholders. The Board has also approved a buyback scheme for partial dilution for its original shareholders at USD 20 (Face value of USD 1), buyback offer letter to be shared in due course.  

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