The Hinduja Group plans to raise its stake in IndusInd Bank from 16% to 26% in several steps. This move comes as its promoter company, IndusInd International Holding, is working on listing on the Afrinex stock exchange based in Mauritius.
IIHL has received approval from the Reserve Bank of India to increase its stake in the bank to 26%. However, the regulatory process is taking time, according to Ashok Hinduja, a director of the Hinduja group.
To acquire an additional 10% stake in IndusInd Bank, IIHL will need to invest over Rs 11,500 crore at the current stock price.
IIHL, an investment arm of the Hinduja brothers, has recently acquired Reliance Capital through the corporate insolvency process and is in the process of acquiring Invesco Asset Management India Ltd. These acquisitions will allow IIHL to expand into mutual funds, stock securities, asset reconstruction, and life, non-life, and health insurance businesses.
The aim is to increase the valuation of IIHL’s investment to $50 billion by 2030 from the current $17 billion, according to Hinduja.
Regarding the listing on Afrinex, no timeline or equity size details were provided. IIHL has invested in Afrinex exchange, and listing on the exchange will provide some original shareholders with an exit opportunity.
Hinduja also mentioned that IIHL has the right to retain the Reliance Capital brand for three years.
However, there are pending approvals from the insurance regulator for the proposed plan, as IRDAI had rejected IIHL’s earlier plan to pledge shares of Reliance General Insurance and Reliance Nippon Life Insurance to raise funds.
Hinduja emphasized that IIHL plans to grow its life and non-life businesses and start health insurance operations. Additionally, IIHL intends to grow Reliance Securities and ARC business while selling non-core businesses such as real estate.
Despite approval from the National Company Law Tribunal (NCLT) for the sale of Reliance Capital, IIHL is awaiting regulatory approvals to proceed with the payment to lenders.
Hinduja expressed concern that without approvals, the payment process might face delays, impacting the acquisition deal.
