Hinduja Group’s IIHL plans fresh fundraise to hike stake in crisis-hit IndusInd Bank: Report

IIHL received in-principle approval from the Reserve Bank of India (RBI) in March 2023 to raise its stake in the bank to 26 percent.

IndusInd Bank’s promoter entity, IndusInd International Holdings Ltd (IIHL), is in early-stage discussions with global long-term investors, including sovereign wealth and pension funds, to raise fresh equity capital, Mint reported, citing two senior executives familiar with the matter.

The move is aimed at increasing the Hinduja Group’s stake in IndusInd Bank, which is currently grappling with an accounting scandal, regulatory scrutiny, and a sharp drop in share prices. The executives told Mint that IIHL is looking to issue new shares and bring in a single global financial investor to support this plan.

According to the report, promoter entities IIHL and IndusInd Ltd together currently hold a 15 percent stake in the private-sector bank, with IIHL alone owning 12.06 percent as of March 2025.

IIHL received in-principle approval from the Reserve Bank of India (RBI) in March 2023 to raise its stake in the bank to 26 percent. “Once the final approval comes, the holdco needs to be ready with cash to buy the remaining stake,” one of the executives told Mint, adding that IIHL had already raised $100 million through a rights issue last year in preparation for boosting its holding from 15 percent to 20 percent.

While the amount IIHL intends to raise in the current round was not disclosed, the executives confirmed to Mint that proceeds will be used both to increase its stake in IndusInd Bank and to repay debt from its recent acquisition of Reliance Capital. Barclays has been engaged to scout for potential investors on behalf of the Hinduja Group, they added.

An email sent to IIHL by Mint remained unanswered, and Barclays declined to comment. Moneycontrol has not independently verified the report.

The capital raise plan comes at a turbulent time for IndusInd Bank. In March, the bank revealed discrepancies worth Rs 2,100 crore in its derivatives portfolio as of December 2024, triggering a forensic audit and internal reviews. The fallout led to the resignations of CEO Sumanth Kathpali and Deputy CEO Arun Khurana.

Following the crisis, the bank reported a net loss of Rs 2,328.92 crore for Q4 FY25, its first quarterly loss in recent memory. Despite this, IIHL has pledged support. On May 22, Chairman Ashok P Hinduja stated, “Though the Capital Adequacy of the Bank is quite healthy, for business growth, should any further equity be required, IIHL, as the promoter of IBL, remains committed to supporting the Bank, as it has done over the past 30 years.”

Hinduja added that the coordinated efforts of current management, under board supervision, have helped maintain the bank’s operational health and capital strength amid ongoing scrutiny.