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IIHL has already received approval from the Reserve Bank of India (RBI) to increase its stake in IndusInd Bank.
Ashok P. Hinduja, Chairman of IndusInd International Holdings Limited
On March 18, Industral International Holdings Limited (IIHL) president Ashok P. Hinduja said that it is an ideal time for the company to increase its stake in IndusInd Bank. Hinduja expressed his intention, saying, “This is a time to extend bets as a promoter.
He also said that if necessary, the promoters are ready to inject capital in IndusInd Bank. However, at the present time, the bank’s capital adequacy level is satisfactory and is not immediate required for additional funds.
IIHL has already received in-Principal approval from the Reserve Bank of India (RBI) to give its stake in IndusInd Bank to 15 percent to 26 percent. The company is now waiting for the final approval from the RBI. Hinduja commented, “All communication reactions are given to the regulator.
Earlier in March, the management of the IndusInd Bank revealed that the internal review of its derived portfolio had highlighted the anomalies related to the ‘other assets and other liability’ accounts. The review was an RBI circular, ‘Master Direction – Classification, Evaluation and the implementation of the operation of the operating portfolio of commercial banks (instructions), 2023,’ which is scheduled to be implemented on 1 April 2024. The anomalies can negatively affect the bank, which is potentially taking 2.35 percent hits, according to the March 10 stock exchange filing.
Hinduja assured that if the IndusInd bank requires additional capital, the promoters would take steps to infect the money. However, he emphasized that the bank does not require additional capital at this time, and additional capital would be unnecessary.
The PWC was appointed to detailed anomalies at the end of February, and their findings are expected to be presented to the RBI by the end of March. Hinduja said that once the PWC report is received, it would be reviewed by the board and its committees, which will determine the responsibility for the issues identified in the previous years.
Regarding the recent acquisition of IIHL of Reliance Capital, Hinduja confirmed the completion of the deal on 18 March. He said, “As we are now speaking, money should go from one escrow to another Escro account of the deal.” IIHL’s resolution plan for Reliance Capital was approved by the National Company Law Tribunal (NCLT) in February 2024. The acquisition gives IIHL control over 42 institutions, including Reliance Nippon Life Insurance, Reliance General Insurance, Reliance Securities and Reliance Asset Reconstruction.
The total cost of acquisition is Rs 9,861 crore, which is funded with Rs 7,300 crore from Barclays and Rs 2,750 crore in equity with 360 one. Additionally, IIHL has invested Rs 200 crore in Reliance General Insurance.
Hinduja also shared a plan to list Reliance Nippon Life Insurance and Reliance General Insurance in the next two years. While the promoter will remain unchanged until the holding listing, IIHL intends to invest in property reconstruction company, insurance companies and securities businesses. However, it plans to exit all other companies.
On Tuesday, IndusInd Bank Limited shares closed at Rs 681.70, up to 0.70%.
