Synopsis : IndusInd Bank plans to raise Rs 30,000 crore (Rs 20,000 crore debt, Rs 10,000 crore equity) and realign its board to include two Hinduja Group promoters, following RBI scrutiny over unreported forex derivative losses and SEBI’s insider trading probe on former executives. The move signals a major governance and capital structure reset ahead of crucial shareholder approvals.
In a significant move, IndusInd Bank has announced plans to raise Rs 30,000 crore in capital, comprising Rs 20,000 crore via debt securities and Rs 10,000 crore through equity instruments such as ADRs, GDRs, or QIPs. This decision arrives four months after the Reserve Bank of India (RBI) highlighted unreported forex derivative losses of around Rs 2,000 crore, and the Securities and Exchange Board of India (SEBI) imposed a trading ban on former top executives over insider trading allegations.
The fundraising is subject to shareholder and regulatory approvals, with the annual general meeting scheduled for August 29 and first-quarter results on July 28. The bank also announced the induction of two Hinduja Group promoter representatives to its board, aligning governance with IndusInd International Holdings and IndusInd Limited, post RBI’s approval.
At the current market price, the Hinduja promoters may need to invest Rs 10,000 crore to increase their stake from 15.08% to 26%, aligning with the RBI’s in-principle approval. Despite comfortable capital adequacy levels, the promoters have shown readiness to inject capital to stabilise confidence and governance amid the ongoing challenges.
Meanwhile, the hunt for a new MD & CEO is underway, with industry leaders like Rajiv Anand (Axis Bank), Rahul Shukla (HDFC Bank), and Anup Saha (formerly Bajaj Finance) reportedly in the running after the previous MD’s resignation.
Earlier this year, the bank admitted to accounting irregularities in its derivatives portfolio, which could affect 2.35% of its net worth, underlining the urgency for governance restructuring and capital strengthening to restore stakeholder confidence.
Disclaimer : This article is for informational purposes only and does not constitute financial advice. Readers should conduct their own research or consult a qualified advisor before making investment decisions.
