IndusInd Bank shares up 2% on buzz about stake hike by promoter

Shares of IndusInd Bank gained up to 2% in intraday trade on Monday following reports that the promoter of the private sector lender, Hinduja Group, is keen on hiking its stake in the bank to up to 26%. IndusInd International Holdings Ltd (IIHL), promoter of the bank, is looking to increase its stake from 16.4% to 26% in multiple tranches.

Reacting to the news, IndusInd Bank shares opened higher at ₹1,491.25, up 0.6% against the previous closing price of ₹1,482.70 on the BSE. During the session so far, the banking stock rose as much as 1.8% to ₹1,510.05, while the market capitalisation increased to ₹1.16 lakh crore.

IndusInd Bank share touched its 52-week high of ₹1,694.35 on January 15, 2024, while it hit a 52-week low of ₹1,065.50 on May 5, 2023. The private bank’s stock has risen 33% in one year; and 2% in six months, while it declined over 6% on a year-to-date (YTD) basis. In the last month, the stock has corrected over 4%, whereas it gained over 2% in a week.

IIHL, an investment arm of the Hinduja brothers, has received the Reserve Bank of India’s nod to hike its stake in the bank to 26%, but the regulatory process is taking time, Ashok Hinduja, director of Hinduja group, reportedly said at a recent media interaction.

In April last year, IIHL received in-principal approval from the central bank to increase its stake in the private lender. In 2021, the RBI permitted banks to increase the promoters’ stakes in a bank to 26% from 15%, subject to the banking company completing 15 years of business commencement.

Last month, IndusInd Bank released its earnings report, posting healthy numbers aided by stable margins, strong fee income, and modest provisions. The bank posted 14.96% year-on-year (YoY) growth in consolidated profit at ₹2,349.15 crore in the March quarter of FY24 compared with ₹2,043.44 crore in the same quarter last year.

Net interest income (NII) for the quarter stood at ₹5,376 crore, up 15% YoY and 2% sequentially. Net interest margin for Q4 FY24 stood at 4.26% against 4.28% in the same period last year and 4.29% in Q3 of FY24.

For the full year ended March 31, 2024, net profit stood at ₹8,977 crore, up by 21% over the previous year at ₹7,443 crore. The NII for the year ended March 31, 2024, increased to ₹20,616 crore, a growth of 17% from ₹17,592 crore last fiscal.

As of March 31, 2024, the balance sheet crossed ₹5 lakh crore mark to ₹5,15,094 crore as against ₹4,57,837 crores as of March 31, 2023, marking the growth of 13%. Deposits grew 14% to ₹3,84,586 crore as against ₹3,36,120 crore, while CASA deposits increased to ₹1,45,666 crore with Current account deposits at ₹46,989 crores and savings account deposits at ₹98,676 crores. Advances as of March 31, 2024, were ₹3,43,298 crore as against ₹2,89,924 crore, an increase of 18% over the last fiscal.  

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