The Hinduja group controlled, IndusInd Bank, plans to raise around Rs 140 crore (Rs 1.4 billion) through global depository receipts by March-end. The bank will issue close to 30 million shares which will listed at the Luxembourg Stock Exchange.
CLSA has been appointed as the lead manager to the issue. The fresh infusion of capital will bring the promoter holding down to about 28 per cent from 31.3 per cent.
The major shareholders in the bank are IndusInd International Holdings Ltd which holds around 23 per cent stake , IndusInd Ltd 5.34 per cent and De Five Mauritius Holdings Ltd 2.41 per cent.
This issue will enable the bank to boost its capital adequacy ratio to 11.25 per cent from 11.10 per cent. It is also planning to raise Rs 50 crore through issuance of lower tier II bonds.
"We want to end March 2007 with a capital adequacy ratio of 11.25 per cent. The fresh infusion of capital is to support the banks growth plans,'' said Bhaskar Ghose, managing director, IndusInd Bank.
After the issue, the paid up capital of the bank will rise to Rs 320 crore (Rs 3.2 billion) from Rs 290 crore (Rs 2.9 billion). The foreign holding in the bank will increase to 25 per cent from about 17 per cent. The ceiling on foreign holding in private sector banks is 74 per cent.
The capital raising will enable IndusInd to pursue new business lines like wealth management and asset reconstruction. Its also planning to expand its presence overseas by setting up an offshore banking unit
At present, the bank has representative offices in Dubai and London. "Our overseas business strategy is to enter into tie ups with banks rather than set up branches abroad,'' added Ghose.
Earlier, the bank was planning to raise capital through private placement to the New Zealand based bank ANZ. This has now been put on a backburner.
Ghose declined to comment on the private placement. However, sources indicate that the bank could explore this option later as the bank is in need of capital.
The bank has 148 branches and has the Reserve Bank of India approval to set up 32 branches more and 100 offsite ATMs. The RBI has also granted business correspondent status to around 750 outlets of ALFIN Services a marketing subsidiary of the bank. This is a boost for IndusInd as it will now be able to market deposit products through these outlets.
The banks deposits base stands at around 15,534 crore (Rs 155.34 billion) in aggregate deposits, the CASA ratio has gone up from 12.28 per cent to 13.68 per cent.
The bank plans to increase the CASA component to 30 per cent in the next two years. Its advances stood at around Rs 11,268 crore, December 2006.
Retail book accounts for 68 per cent of the bank's loan book. At the Bombay Stock Exchange the bank's scrip ended the day 3 per cent lower at Rs 38.90 as against its previous close of Rs 40.35.
