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MUMBAI: Mauritius-registered IndusInd International Holdings (IIHL), promoter of IndusInd Bank, has approved a capital raise of $1.5 billion to fund its stake increase in the bank and acquire Reliance Capital (RCap).
In its meeting held on Monday, the company board decided to expand its business horizon in India and other global geographies in the banking, financial services and insurance (BFSI) sector. The acquisition of RCap will result in the group owning Reliance General Insurance and other subsidiaries of the finance company.
“This strategic decision opens boundless opportunities to expand IIHL’s business horizon in India and other global geographies in the BFSI sector. IIHL’s aspirations will not be capital constrained as raising capital for IIHL is not an issue at all,” said Ashok P Hinduja, chairman of IIHL
The capital will help IIHL increase its promoter shareholding in IndusInd Bank from the current 15% to the proposed 26%. RBI’s new rules allow promoters to increase their shareholding up to 26% by following the procedure laid down subject to the central bank’s assessment of ‘fit and proper’ status.
“Accordingly, the board of directors of IIHL have resolved to undertake capital raise in a phased manner to mobilise the required funds for infusion,” the company said. The second objective of the capital raising is towards equity participation for the RCap acquisition. The administrator of RCap has issued a letter of intent following the creditors approving IIHL’s Rs 9,650-crore bid. “Needless to mention, the underlying operating companies in RCap are in insurance (life, general and health), asset reconstruction & broking and augur well to meet IIHL’s aspirations in the BFSI sector,” IIHL said in a statement.
Global sovereign/private equity funds are interested in participating in IIHL’s growth story. It is likely to be listed by the next year, and this would also give a trading option to its shareholders.
In its meeting held on Monday, the company board decided to expand its business horizon in India and other global geographies in the banking, financial services and insurance (BFSI) sector. The acquisition of RCap will result in the group owning Reliance General Insurance and other subsidiaries of the finance company.
“This strategic decision opens boundless opportunities to expand IIHL’s business horizon in India and other global geographies in the BFSI sector. IIHL’s aspirations will not be capital constrained as raising capital for IIHL is not an issue at all,” said Ashok P Hinduja, chairman of IIHL
The capital will help IIHL increase its promoter shareholding in IndusInd Bank from the current 15% to the proposed 26%. RBI’s new rules allow promoters to increase their shareholding up to 26% by following the procedure laid down subject to the central bank’s assessment of ‘fit and proper’ status.
“Accordingly, the board of directors of IIHL have resolved to undertake capital raise in a phased manner to mobilise the required funds for infusion,” the company said. The second objective of the capital raising is towards equity participation for the RCap acquisition. The administrator of RCap has issued a letter of intent following the creditors approving IIHL’s Rs 9,650-crore bid. “Needless to mention, the underlying operating companies in RCap are in insurance (life, general and health), asset reconstruction & broking and augur well to meet IIHL’s aspirations in the BFSI sector,” IIHL said in a statement.
Global sovereign/private equity funds are interested in participating in IIHL’s growth story. It is likely to be listed by the next year, and this would also give a trading option to its shareholders.
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