IndusInd Bank is in advanced talks with a foreign bank for a strategic equity partnership. The bank is in negotiations to sell up to 5 per cent stake to the foreign bank from the "developed world" and a decision is expected before the end of this quarter or early next quarter, Bhaskar Ghose, managing director, said.It is not required to obtain permission from the Reserve Bank of India for acquiring up to 5 per cent stake in a private bank, but this becomes necessary for acquiring over 5 per cent and up to 10 per cent stake."The foreign bank with which we are in talks is well known with presence across the globe," Ghose told reporters in Bangalore, after launching a five-year and above deposit scheme offering an interest of 8.50 per cent a year.The Hinduja group-promoted bank with corporate headquarters in Mumbai is seeking to bring on board a foreign bank which has "good processes" in place and can bring innovative products and services on the table, he said.Ghose's statement has triggered intense speculation in the equity markets over the most likely strategic partner of IndusInd. The Netherlands-based ABN Amro is being seen as the most likely candidate. The Hinduja group has 31.34 per cent stake in IndusInd. Ashok Leyland, a group company, has held 12.89 per cent stake in the bank since the merger of its subsidiary Ashok Leyland Finance with the bank two years ago.Ghose said the strategic partner would either buy a part of the stake held by an existing shareholder or issue fresh equity to shore up the bank's capital adequacy.The capital adequacy ratio of IndusInd at the end of June declined to 9.85 per cent, which is just above the minimum regulatory requirement of 9 per cent, from 11.08 per cent a year ago and 10.54 per cent at the end of March this year.The bank also plans to raise Rs 250 crore through subordinated debt in the domestic or overseas market to augment its tier-II capital. "To achieve the business goals set by the bank we need fresh capital to grow. Depending on market conditions, we will issue bonds," Ghose said. The bank also plans to take a stake in an asset reconstruction company. IndusInd Bank shares today rose 17.14 per cent to close at Rs 47.85 per share.
