| IndusInd Bank has received an in-principle approval from the bank board to take over Ashok Leyland Finance — a part of the Hinduja group. The board of the non-banking finance company (NBFC) will meet next week to decide the matter.
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| “We now will have to put the proposal before the board of Ashok Leyland Finance. If they accept the proposal, we will go in for the necessary statutory approvals,” said IndusInd Bank’s managing director Bhaskar Ghose.
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| The bank has decided to appoint Ambit Corporate Finance as consultants for the deal. Valuers for the deal will be appointed after the NBFC board approves the proposal.
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| Ashok Leyland Finance has 140 branches across the country, while IndusInd Bank has 57 branches.
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| The bank is looking at converting half of the NBFC’s branches into bank branches if the Reserve Bank of India approves the proposal. Ashok Leyland Finance is into two-wheeler finance financing, truck financing and equipment leasing.
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| “We are interested in two-wheeler financing and also a part of the truck financing. The company also has a good customer base to whom we can cross-sell our products,” added Ghose.
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| The bank will also be benefited as it will be able to meet the priority sector financing targets on the back of truck financing.
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| The loan book size of Ashok Leyland Finance is at around Rs 1,800 crore, while that of the bank is at around Rs 4,000 crore.
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| The total asset base of the bank is at around Rs 7,500 crore, while that of the NBFC is at Rs 3,000 crore.
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| “The fixed deposits of the company are high cost ones. However, the company has in recent times bought down the dependence on these deposits,” he added.
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| The promoters’ shareholding in Ashok Leyland Finance is at 62.98 per cent, while that in IndusInd Bank is at 41.3 per cent.
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| Post-merger, promoters shareholding in the bank will go up. The IndusInd Bank scrip closed today at Rs 37.15, up by 5.54 per cent. The share price of Ashok Leyland Finance was up by 4.31 per cent at Rs 81. |
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