IndusInd Bank shares rise after RBI not to promoter company to raise stake

IndusInd Bank Ltd shares gained nearly 2% on Monday, May 6, to an intraday high of ₹1,510 per piece on the NSE after reports of the promoter entity raising its stake up to 26% in the lender.

IndusInd Bank’s promoter company, IndusInd International Holding (IIHL), is expected to increase stake in the lender from 16% to 26%, according to reports.

IIHL, the investment arm of Hinduja Brothers, has received an approval from the Reserve Bank of India (RBI) to increase its stake in the private lender up to 26% in multiple tranches over a period of 14 days, according to a Moneycontrol report.

In a statement, Ashok Hinduja, the chairman of IIHL, said that the company will need to infuse a capital amount of over ₹11,500 crore in IndusInd Bank to raise its stakeholding in the lender by another 10%. The promoter holding in IndusInd Bank currently stands at 16.4%.

In April 2023, IIHL had received an in-principle approval from the bank regulator RBI for increasing its stake in IndusInd Bank to an upper ceiling of 26%.

For the quarter ended on March 31, 2024, IndusInd Bank reported a consolidated net profit of ₹2,349.15 crore, marking a rise of 15% on a year-on-year (YoY) basis from ₹2,043.4 crore posted in the same quarter last year.

The lender's consolidated total income made a double-digit growth of 20.8% to ₹14,706.66 crore in the March quarter compared to ₹12,174.3 crore in the corresponding quarter a year ago.

The bank’s gross Non Performing Asset (NPA) contracted to 1.92% in Q4FY24 from 1.98% in the year-ago period, while staying the same as the preceding quarter’s figure. The net NPA also followed the trend, dipping to 0.57% in the quarter under review from 0.59% in Q4FY23, while remaining unchanged from 0.57% in the December quarter.

Shares of IndusInd Bank closed 0.9% higher at ₹1497 apiece on the NSE.