MUMBAI: IndusInd Bank’s promoter, Mauritius-registered IndusInd International Holdings (IIHL) has approved capital raising of $1.5 billion to raise its stake in the bank and acquire Reliance Capital (RCap).
In its meeting held on Monday, the company’s board decided to expand its business horizon in the banking, financial services and insurance (BFSI) sector to India and other global geographies. As a result of the acquisition of RCap, the group will have Reliance General Insurance and other subsidiaries of the finance company.
“This strategic decision opens up limitless opportunities to expand IIHL’s business horizons in India and other global geographies in the BFSI sector. There will be no dearth of capital on IIHL’s aspirations as raising capital is not an issue for IIHL.” Ashoka P Hinduja, President, IIHL
The capital will help IIHL increase its promoter stake in IndusInd Bank from the current 15% to the proposed 26%. The new RBI regulations allow promoters to increase their shareholding up to 26% by following the prescribed procedure, subject to the central bank’s assessment of the ‘fit and proper’ situation.
“Accordingly, the Board of Directors of IIHL has resolved to raise capital in a phased manner to raise the required funds for the investment,” the company said. The second objective of raising capital is equity participation for the RCap acquisition. The administrator of RCAP has issued a letter of intent after lenders approved IIHL’s bid of Rs 9,650 crore. IIHL said in a statement, “Needless to state that RCAP’s underlying operating companies are in insurance (life, general and health), asset reconstruction and broking and augurs well for IIHL’s aspirations in the BFSI sector.” “
Global sovereign/private equity funds are interested in participating in the growth story of IIHL. It is likely to be listed by next year and will also provide trading options to its shareholders.
In its meeting held on Monday, the company’s board decided to expand its business horizon in the banking, financial services and insurance (BFSI) sector to India and other global geographies. As a result of the acquisition of RCap, the group will have Reliance General Insurance and other subsidiaries of the finance company.
“This strategic decision opens up limitless opportunities to expand IIHL’s business horizons in India and other global geographies in the BFSI sector. There will be no dearth of capital on IIHL’s aspirations as raising capital is not an issue for IIHL.” Ashoka P Hinduja, President, IIHL
The capital will help IIHL increase its promoter stake in IndusInd Bank from the current 15% to the proposed 26%. The new RBI regulations allow promoters to increase their shareholding up to 26% by following the prescribed procedure, subject to the central bank’s assessment of the ‘fit and proper’ situation.
“Accordingly, the Board of Directors of IIHL has resolved to raise capital in a phased manner to raise the required funds for the investment,” the company said. The second objective of raising capital is equity participation for the RCap acquisition. The administrator of RCAP has issued a letter of intent after lenders approved IIHL’s bid of Rs 9,650 crore. IIHL said in a statement, “Needless to state that RCAP’s underlying operating companies are in insurance (life, general and health), asset reconstruction and broking and augurs well for IIHL’s aspirations in the BFSI sector.” “
Global sovereign/private equity funds are interested in participating in the growth story of IIHL. It is likely to be listed by next year and will also provide trading options to its shareholders.