The Hinduja Group will raise its stake in IndusInd Bank from 16% to 26% in multiple tranches even as its promoter company IndusInd International Holding is working on a plan to list on Mauritius-based stock exchange Afrinex.
IndusInd International Holding Ltd (IIHL) has received the Reserve Bank of India’s approval letter to raise its stake in the bank to 26%, but the regulatory process is taking time, Ashok Hinduja, director of Hinduja group, said at a recent media interaction.
At the current stock price, IIHL will need to infuse a little over Rs 11,500 crore for an additional 10% stake in IndusInd Bank. As per the stock exchange disclosures, promoter holding currently stands at 16.40%.
IIHL, an investment arm of the Hinduja brothers, recently won Reliance Capital under the corporate insolvency route and is in the process of acquiring Invesco Asset Management India Ltd. These acquisitions will enable IIHL’s foray into mutual fund, stock securities, asset reconstruction, and life, non-life and health insurance businesses.
“We are targeting to grow the valuation of our investment in IIHL to $50 billion by 2030 from $17 billion now,” Hinduja said.
On listing the company at Afrinex, he did not give a timeline or details of equity size but said IIHL has invested in Afrinex exchange and listing on the exchange will give some original shareholders exit.
IIHL outbid Torrent Investment in the race to take over Reliance Capital, a financial services company previously owned by Anil Ambani, with an offer of Rs 9,661 crore in the auction process. Torrent has moved the Supreme Court, arguing that the sale process was flawed. The matter is pending before the court.
Banking regulator RBI and stock market regulator Sebi have approved the sale process, but approval from the insurance regulator is pending. Insurance Regulatory Development Authority of India (IRDAI) had rejected IIHL’s earlier plan to pledge shares of Reliance General Insurance and Reliance Nippon Life Insurance to raise funds.
Hinduja said a new plan proposed by IIHL is awaiting IRDAI’s approval. Nippon Group has a 49% stake in Reliance Nippon Life.
Hinduja said the plan is to grow life and non-life businesses and start health insurance operations.
IIHL also plans to grow Reliance Securities and ARC business, he said, dismissing rumours that the group wants to sell these two businesses. He said IIHL will sell non-core businesses such as real estate.
Hinduja also said they have the right to retain the Reliance Capital brand for three years.
IIHL is prepared to pay Reliance Capital’s lenders within 48 hours of receiving the insurance regulator’s approval, he said.
The National Company Law Tribunal (NCLT) has approved the sale and directed IIHL to pay within 90 days from approval or by May 27, subject to all regulatory approval.
“Now, if the approvals are not there, no buyer will make the payment of Rs 9,800 crore, and suppose there is any delay or money is stuck up, we can’t take control of the company,” Hinduja said.
