Shares of private lender IndusInd Bank advanced 5.6 per cent to Rs 556 on the BSE on Wednesday on report that US-based hedge fund Route One Investment may up stake in the bank from current 5.4 per cent to 9.9 per cent.
According to a report by Moneycontrol, Route One Investment Company currently holds a 5.41 per cent stake in IndusInd Bank through two entities but intends to hike it to around 9.9 per cent via a preferential allotment of shares, helping the bank strengthen its Balance Sheet and raise capital.
“A few other investors may also join Route One and participate in what could potentially be a wider fundraising round through the preferential allotment route, under which the bank could dilute a combined stake of 10 percent to all parties… Based on the current market capitalisation of IndusInd Bank, a 10 per cent stake is valued at nearly Rs 3,650 crore,” the report said.
It added: RBI was approached for permission and Route One Investment Company has obtained the requisite approval from the regulator for the stake hike.
So far, the bank has issued no statement on the report.
In the month of June, promoter group IndusInd International Holdings had bought 1.73 million equity shares (representing 0.25 per cent of total equity) worth of Rs 85.51 crore of IndusInd Bank through open market. Post acquisition, IndusInd International Holdings stake in the bank increased to 9.60 per cent to 9.85 per cent, the bank’s shareholding pattern showed.
At 9:56 am, the stock was trading 5 per cent higher at Rs 553.5 apiece on the BSE, as against 70 points, or 0.19 per cent, rise in the benchmark S&P BSE Sensex. A combined 16.69 million shares had changed hands on the counter on the NSE and BSE till the time of writing of this report. With today’s gains, the stock of the bank has rallied 14.10 per cent so far this week compared to 2.2 per cent gain in the Sensex, BSE data shows.
In a recent June quarter business update, the bank said it’s net advances at the end of Q1FY21 stood at little over Rs 2 trillion, up 4 per cent year-on-year (YoY) from Rs 1.93 trillion at the end of Q1FY20. Sequentially, the advances dipped from Rs 2.06 trillion. As regards deposits, they accounted for Rs 2.11 trillion at the end of June quarter, up 6 per cent YoY from Rs 2 trillion.