Hinduja Group to increase its stake in IndusInd Bank from 16% to 26%

6 May 2024 , 10:45 AM

The promoter entity of IndusInd Bank – Hinduja Group’s IndusInd International Holding (IIHL) – is looking to list on the Mauritius stock exchange, Afrinex. Meanwhile, IIHL will increase its stake in the bank from 16% to 26%, in tranches.

According to Ashok Hinduja, director of the Hinduja group, in a recent media encounter, IndusInd International Holding Ltd (IIHL) has gotten a letter from the Reserve Bank of India approving it to increase its stake in the bank to 26%; however, the regulatory procedure is taking time.

IIHL will need to invest somewhat more than ₹11,500 Crore, at the present stock price, to acquire an extra 10% of IndusInd Bank. The current percentage of promoter holding, according to stock exchange disclosures, is 16.40%.

The Hinduja brothers’ investment company, IIHL, recently acquired Reliance Capital through corporate insolvency and is currently in the process of buying Invesco Asset Management India Ltd. IIHL’s entry into the mutual fund, stock securities, asset reconstruction, and life, non-life, and health insurance sectors will be made possible by these acquisitions.

Hinduja stated, “We aim to increase the valuation of our investment in IIHL from $17 billion to $50 billion by 2030.”

He stated that IIHL has invested in the Afrinex exchange and that the company’s listing on the exchange will allow some of the original owners to exit, but he did not provide a date or specifics regarding the size of the equity.

In the bidding process, IIHL outbid Torrent Investment with an offer of ₹9,661 Crore to acquire Reliance Capital, a financial services firm that was formerly owned by Anil Ambani. Torrent has petitioned the Supreme Court, claiming that there were errors in the sale procedure. The court is still considering the case.

The sale procedure has received clearance from the stock market regulator Sebi and the banking regulator RBI, but the insurance regulator’s approval is still pending. IIHL’s prior proposal to raise money by pledging shares of Reliance General Insurance and Reliance Nippon Life Insurance was denied by the Insurance Regulatory Development Authority of India (IRDAI).

According to Hinduja, the IRDAI has not yet approved a new plan that IIHL has suggested. Reliance Nippon Life is 49% owned by Nippon Group.

According to Hinduja, the goal is to launch health insurance operations and expand non-life and life insurance businesses.

He denied allegations that the group intended to sell Reliance Securities and ARC business, saying that IIHL also intended to expand these two businesses. IIHL will divest non-core businesses including real estate, he said.

Hinduja added that they are entitled to three years of brand retention with Reliance Capital.

After getting the go-ahead from the insurance regulator, IIHL is ready to reimburse Reliance Capital’s lenders in less than 48 hours, he stated.

The sale has been approved by the National Company Law Tribunal (NCLT), which has also instructed IIHL to make the payment by May 27th, subject to regulatory approval, or within 90 days after the permission.

“A buyer will not pay the ₹9,800 Crore required if the approvals are not there, and if there is a delay or financial difficulties, we will not be able to acquire the company,” Hinduja stated.

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