IndusInd Bank's Board approves fresh capital raise of Rs. 3,288 crore through preferential issuance of Equity

The Board of Directors of IndusInd Bank Limited ("Bank"), in their meeting held today, considered and approved a proposal to raise Rs. 3,288 crore through a preferential issue of fully paid up 6.275 crore equity shares at a price of Rs 524/- per share, to a set of marquee investors and the Promoter. The preferential issue is subject to shareholder approval and other necessary approvals. The extraordinary general meeting ("EGM") of shareholders, to consider the preferential issue, is scheduled to be held on 25 August 2020.

Route One Fund I LP - 71,59,788 shares - Rs. 375 crore
Route One Offshore Master Fund LP - 1,06,93,264 shares - Rs. 560 crore
ICICI Prudential Life Insurance Company Limited - 1,62,21,374 shares - Rs. 850 crore
Tata Investment Corporation Limited - 57,25,190 shares - Rs. 300 crore
AIA Company Limited - 78,30,152 shares - Rs. 410 crore
Hinduja Capital Limited - 57,03,816 shares - Rs. 299 crore
IndusInd International Holdings Limited - 94,13,661 shares - Rs. 493 crore

The Bank is already well capitalized with a CRAR (including Q1 FY21 profits) of 15.3% as of 30th June 2020. Subsequent to the proposed capital raise, the post-issue CRAR is estimated to be 16.5%.

The Bank will use this capital to continue to invest in liabilities and asset franchise, technology and infrastructure platforms, to expand reach, product offerings and to improve customer experience whilst ensuring sustainable financial parameters.

Mr. Sumant Kathpalia, Managing Director and CEO, IndusInd Bank Limited, said. "We thank our existing shareholders for their continued trust and support and welcome our new shareholders. This capital raise from long term, foreign as well as domestic investors, is strategic for us as this helps us bolster the Bank's balance sheet and position the Bank well as the economy gradually navigates out of the Covid-19 pandemic. The capital raise also reflects the continued support and confidence that our Promoters have in the Bank. We recognize and value the trust and confidence being placed on us by our shareholders, depositors, customers and rating agencies and are committed to remaining focused on creating value for all our stakeholders."

In accordance with SEBI ICDR Regulations, the proposed preferential issue shall be completed within a period of 15 days from the date of approval by the shareholders at the EGM.

Morgan Stanley and Citigroup Global Markets India Private Limited acted as financial advisors, and S&R Associates acted as legal counsel to IndusInd Bank Limited.

Shares of INDUSIND BANK LTD. was last trading in BSE at Rs.526.9 as compared to the previous close of Rs. 506.4. The total number of shares traded during the day was 1051463 in over 27662 trades.

The stock hit an intraday high of Rs. 529.1 and intraday low of 511.05. The net turnover during the day was Rs. 548346452.

Source : Equity Bulls

Keywords