The foreign investment would help balance IndusInd's precarious position as it faces mounting bad loans and a potential ratings downgrade
Japanese insurance major Nippon Life is reportedly in discussion with IndusInd Bank for strategic investment in the private sector lender.
The move will help Nippon Life, Japan's largest life insurer in revenue terms, gain a bancassurance partner for its insurance product distribution, and corporate treasury money for asset management in India, sources told The Economic Times.
A bank distribution model is also assumed to be the most profitable one. For the bank, meanwhile, foreign investment would help balance its precarious position as it faces mounting bad loans and a potential rating downgrade.
Moneycontrol could not independently verify the report.
In April, IndusInd had tasked Morgan Stanley and Citi with raising $500-750 million in confidence capital from private investors.
The Hinduja family – which owns a majority stake, had approached the Reserve Bank of India (RBI) for permission to increase stake to 26 percent from the prescribed 15 percent. after Kotak Mahindra Bank promoter Uday Kotak was granted a similar relaxation.
Nippon Life and IndusInd Bank did not respond to queries, as per the report.
For Nippon Life, this would be its first investment in a bank. It has usually acquired insurance and asset management companies in Asia.“The talks accelerated after the Max Life and Axis Bank transaction,” an official told ET, adding that strategic investors were sought after private equity suitors pulled back.