Promoters of IndusInd Bank, in a regulatory filing, informed the exchanges about their plan to increase their stake in the lender by purchasing additional shares from the open market. It said, “We forward herewith a copy of communication received from IndusInd International Holdings Ltd. and IndusInd Ltd., Promoters of the Bank, regarding their proposal to acquire shares of our Bank from the secondary market.”
The promoters of IndusInd Bank, IndusInd International Holding Ltd and IndusInd Ltd currently acquire 14.68% of the paid-up share capital of IndusInd Bank Ltd while the regulatory cap in private banks for promoter shareholding is fixed at 15%. The promoters on June 5, 2020 told Sumant Kathpalia, Managing Director and CEO of IndusInd Bank, “We have to inform that we shall now purchase additional shares from open market in India, within the overall regulatory prescribed promoter equity holding cap.”
In March, Public lender IndusInd Bank, in a separate regulatory filing, stated that the promoters, Hinduja Group, applied to the Reserve Bank of India (RBI) for increasing the permissible promoter shareholding to 26% from the current rule of RBI limiting promoters’ stake to 15%. Till now, RBI now has not given its approval on the matter. The request is followed by the decision when Kotak Mahindra Bank promoters were allowed to hold up to 26% stake in the bank by RBI.
As per the RBI’s guidelines, private banks are mandated to retrench their holdings to 40% within three years, 20% within 10 years and 15% within 15 years from commencement of operations.