Ashok P Hinduja, Chairman of IIHL (IndusInd International Holdings Ltd) on March 18 said that it is an opportune time to increase the stake in the IndusInd Bank.
"This is an opportune time as a promoter to increase stake. If this is the time at this price, we would like to increase stake," Hinduja said on the sidelines of the press conference after completion of acquisition of Reliance Capital.
IIHL has already got the in-principal approval from the Reserve Bank of India (RBI) to increase the stake in the IndusInd Bank to 26 percent from the current 15 percent. The company is waiting for the final approval from the RBI.
"All communication responses have been given to the regulator. It is now left to the regulator when and how they will give us," Hinduja said.
On March 10, the management of IndusInd Bank indicated that during an internal review of processes relating to ‘Other Asset and Other Liability' accounts of its derivative portfolio, the bank noted some discrepancies.
The internal review was necessitated by the implementation of a RBI circular called ‘Master Direction - Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2023 issued in September 2023, including accounting of derivatives, applicable from April 01, 2024,'
The discrepancies may impact the bank adversely with its net worth taking a hit of 2.35 percent as of December quarter, the bank said in a stock exchange filing March 10.
"Whenever IndusInd Bank needs capital, the promoter will infuse capital. The bank doesn't need additional capital now and excess capital will be of no use," Hinduja said.
PwC was appointed around the last week of February to conduct detailed investigations. The global consultancy major is expected to furnish its report to RBI by end of March.
Hinduja on the PwC report said that once the report comes, it will go to the board, the board will review, they have their various committees and then they will take a call, who is the person responsible in the last so many years.
Meanwhile, IIHL has completed the acquisition of the Reliance Capital today. "As we are speaking now, the money must be going from one escrow to the other escrow account of the deal," Hinduja said.
The National Company Law Tribunal (NCLT) approved IIHL’s resolution plan for Reliance Capital, once an Anil Ambani company, in February 2024. The acquisition will grant IIHL control over 42 entities, with key subsidiaries including Reliance Nippon Life Insurance, Reliance General Insurance, Reliance Securities, and Reliance Asset Reconstruction.
The cost of the acquisition stands at Rs 9,861 crore, financed through Rs 7,300 crore in debt raised from Barclays and 360 ONE, and Rs 2,750 crore in equity. Additionally, IIHL has invested Rs 200 crore in Reliance General Insurance as capital.
Further, Hinduja said that the company will look for a listing of Reliance Nippon Life Insurance Company and Reliance General Insurance in next 2 years
The promoter holding in the company will not change till the time of listing, he added.
Company will stay invested in ARC company, insurance companies and securities company, rest will exit, Hinduja added.
"We have two companies, one is securities, which is a brokerage company, which we would like to continue and grow that company. And another one is asset restruction company. So, other than these two, all other companies will exit," he added.
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