Hinduja Group to up stake in IndusInd Bank

India, Nov.10, 2004
moneycontrol
NRI Press

The Hinduja Group has sought the RBI's approval to increase its stake in IndusInd Bank to 40%.
The Hinduja Group has sought the Reserve Bank of India, RBI's approval to increase its stake in IndusInd Bank to 40%.

At present, the Hindujas hold 31.3% stake in IndusInd Bank through its Mauritius-incorporated company IndusInd International Holdings. "The promoters of the bank had already obtained the Foreign Investment Promotion Board, FIPB, approval to increase the stake to 40%. This shows that the promoters are firmly behind the bank," IndusInd Bank managing director Bhaskar Ghose said today.

Ghose said the stake may be raised through market purchases. Apart from the Hinduja Group, Ashok Leyland Finance, another Hinduja Group company, holds 16% stake. The rest is widely held. Ghose said the RBI has also directed Ashok Leyland Finance to offload 6% as per the norms.

However, Ghose refused to speculate whether the Hindujas will be buying the available chunk. "It's up to the promoters to decide how they will increase the stake and what they will do to offload the stake," he said.

Apart from giving a thrust to the corporate segment which comprises 60% of the bank's portfolio, the bank is providing a thrust to retail and to the NRI segments. "After Ashok Leyland Finance merged with us, we saw a lot of opportunity in commercial vehicles and two-wheeler financing. We have also focussed on NRI accounts which contribute to a substantial chunk of business, and we've opened two branches in Dubai and London," Ghose said. He said IndusInd is also devising a business model to expand in the overseas markets like South-East Asia and USA. "We are not only focussing on branch expansion in overseas markets. The business model will outline a different way of overseas growth," he said.

He said that the bank is aiming at a business target of Rs 18,000 crore (Rs 180 billion) this year.

Speaking during the inauguration of the bank's 69th branch in Kolkata, Ghose further said that the bank has come out with different trading schemes to attract the trading community. The bank will be having 200 branches by the end of 2005, after integration with Ashok Leyland Finance's branches.