Budget 2020

IndusInd Bank gets ₹2,021 crore capital boost from promoters

The two promoter entities are IndusInd International Holdings Limited and IndusInd Limited.

Hinduja Group’s IndusInd Bank has received ₹2,021 crore equity from the promoters after the conversion of preferential warrants into equity shares.

“The warrants were issued as an integral part of the merger with Bharat Financial Inclusion Limited in July 2019. The Promoter entities had paid ₹673 crore at the time of subscription to the warrants and the balance amount of ₹2,021 crore was paid today,” IndusInd Bank said in a BSE filing.

The two promoter entities are IndusInd International Holdings Limited (IIHL) and IndusInd Limited (IL).

The Finance Committee of the Bank on Thursday approved allotment of 1,57,70,985 shares to the promoter entities. The warrants are converted at a price of ₹1,709 per share reflecting a premium of 65% over the closing price on Wednesday.

The private sector lender had issued convertible warrants to IIHL and its subsidiary IL on July 6, 2019, for a total amount of ₹2,695.26 crore against 1,57,70,985 warrants.

While they paid ₹673.82 crore towards 25% of the warrant subscription at a price of ₹1,709 per piece, the rest of ₹2,021.44 crore was to be paid on January 5, 2021, for conversion of remaining 75% warrants into equity shares.

“The bank’s capital adequacy ratios got further boost with this infusion,” IndusInd Bank said.

“The Capital Adequacy Ratio including 9MFY21(April-December) profits was at 16.93% as of December 31, 2020 and this will get augmented to approximately 17.68% with this capital inflow,” it added.

In September 2020, the bank completed preferential issues of equity capital of ₹3,288 crore and this was subscribed by the promoter as well. Together with the current warrants conversion, the bank has raised ₹5,309 crore of equity capital during 2020-21. IndusInd Bank stock was trading ₹0.79% up at ₹1040.80 on BSE.

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