IndusInd raises Rs 753 crore through preferential issue

Mid-sized private sector lender IndusInd Bank today said that it has raised Rs 752.74 crore through a preferential issue to maintain the promoter Hinduja Group's ownership in the bank at 15 per cent.
With the preferential issue, which got done last Thursday, the total capital raised by the bank in this round, including Rs 4,327.98 crore through an institutional placement on July 3, stood at Rs 5,081 crore, the city-based bank said in a statement today.
The capital will be deployed for expansion of the loan book, which it aims at 30 per cent in the next few years from its smaller base.

In the preferential issue, IndusInd International Holdings and its subsidiary IndusInd bought shares at Rs 857.20 a piece, which is higher than the price paid by the QIP investors on July 3, the bank said in a statement.
As of June 30, the promoter shareholding stood at 15.04 per cent, which had dipped due to the July 3 QIP issue.
The bank board had earlier decided to issue preferential shares to promoters not above 1.5 per cent of the total base, to maintain their shareholding at 15 per cent.

Its total capital adequacy as of June 30 was 12.43 per cent under the Basel-III regulations, with the core tier-I at 11.55 per cent.

Bank's chief financial officer S V Zaregaonkar had said the fresh capital will sustain for three years, assuming a 30 per cent credit growth, which will take up the capital adequacy to over 17 per cent from the present 12.43 per cent.
Managing director and chief executive Ramesh Sobti said the new capital will be used only for "organic growth" in loans and not for any other purpose.
"Despite the challenging environment, IndusInd Bank has delivered a consistent financial performance and the demand for our shares is testimony to our effective business model," Sobti said in the statement, calling the capital raising as one of the "standout equity transactions" of the year.

Morgan Stanley, J M Financial and CLSA were the joint global coordinators and book running lead managers to the QIP issue, while Citigroup, Credit Suisse, Goldman Sachs and J P Morgan were the book running lead managers for it, it said.
The bank scrip shed 4.20 per cent to close at Rs 910.55 a piece on the BSE as against 1.27 per cent correction in the benchmark Sensex.