IndusInd Bank promoter — the Hinduja Group — has sought the Reserve Bank of India’s (RBI’s) approval to increase its stake in the lender to 26% from the 15% now, the bank said in a statement.
The move comes after the banking regulator allowed Kotak Mahindra Bank promoters to reduce their stake to 26%. The RBI norms had earlier capped promoter stake at 15%.
“... the promoter has sought RBI approval to increase shareholding to 26% and they await further guidance from the regulator,” the bank said.
The promoter has informed the exchanges about the simultaneous release of non-disposal undertaking with the creation of a pledge in relation to 23.8 million shares of the bank.
“No new borrowing was undertaken and was merely a formalisation of a three-year old arrangement. The money was originally raised to make an overseas acquisition which did not fructify — the pledge is a small fraction of the promoter holding in the bank,” the statement said.
The bank also said a couple of State government entities have made withdrawals amounting to less than 2% of the total deposits.
“We are engaging with them to reiterate the stance of the regulator that the government deposits in all private sector banks are safe,” it said. The moratorium on Yes Bank has led to some State governments withdrawing deposits from private banks. Another private lender, RBL Bank, also had a similar experience.
Heavy selling pressure
The statement from the Hindujas comes amid the bank’s stock coming under heavy selling pressure. IndusInd Bank was the top loser in the Sensex pack on Wednesday.
The stock lost nearly 24%, or ₹144.45, to close at ₹459.85 on the BSE. Earlier in the day, it fell to a 52-week low of ₹382.55, or nearly 37% lower compared with Tuesday’s close of ₹604.30.
In the last one month, shares of IndusInd Bank had fallen almost 60%, as the stock had closed at ₹1,144.15 on February 18.
In the statement, the bank tried to ally investors’ concerns regarding asset quality.
“...[the] bank is financially strong, well-capitalised, profitable, and a growing entity with strong governance,” it said.
On asset quality, the bank said its gross NPA ratio, which was 2.18%, was the second lowest in the industry amongst large private sector banks and the figures were expected to be pretty much in line with those of the last quarter. It expects net NPA ratio of 1.05% as at the last quarter to fall below 1%, which is in line with the aim to take provision cover beyond 60%.