Hinduja Group Set to Invest ₹10,000 Crore in IndusInd Bank, Boost Stake to 26%: Report

Rajesh
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The Hinduja Group, a prominent conglomerate, is reportedly engaged in discussions to invest a substantial amount of ₹10,000 crore in IndusInd Bank, aiming to increase its stake from 17% to 26%. According to a recent report by the Economic Times, this strategic move is expected to be finalized by the second half of the fiscal year 2023-24.

Hinduja Group Set to Invest ₹10,000 Crore in IndusInd Bank, Boost Stake to 26%

IndusInd Bank's Market Performance:

IndusInd Bank's shares closed at ₹1,308.45 on the Bombay Stock Exchange (BSE), witnessing a 2.76% increase. Notably, the stock has displayed a year-to-date growth of 6.66% and an impressive 58.99% surge. This investment news comes after the Reserve Bank of India (RBI) granted preliminary and conditional approval earlier this year to IndusInd International Holdings, an entity under the Hinduja Group, permitting it to raise its stake in IndusInd Bank to 26%.

Impressive Financial Results:

IndusInd Bank outperformed market expectations, delivering a standalone net profit of ₹2,040.51 crore for the quarter ending in March. This marked a significant 50% increase compared to the previous year's figure of ₹1,361.37 crore. The bank's net interest income (NII) also exhibited strong growth, reaching ₹4,669.46 crore, a notable 17% rise compared to the previous year.

Quarterly Performance Highlights:

During the fourth quarter of fiscal year 2022-23 (Q4FY23), IndusInd Bank's total income grew by 16% year-on-year to reach ₹6,823 crore, while its other income increased by 13% to ₹2,514 crore. The net interest income (NII) for the same period witnessed a substantial 17% surge to ₹4,669 crore, compared to the corresponding quarter of the previous year.

Improved Asset Quality:

IndusInd Bank achieved impressive results in terms of asset quality during the January-March period. The gross non-performing assets (NPAs) ratio declined to 1.98% from the sequential quarter's 2.06% and the year-ago quarter's 2.27%. This reflects the bank's successful efforts in managing and reducing non-performing assets.

Decline in Provisions:

Provisions, excluding taxes and contingencies, decreased by 29% to ₹1,030 crore in the March quarter, showcasing a substantial improvement from ₹1,461 crore during the same period the previous year. This decline in provisions further strengthens the bank's financial position and outlook.

Conclusion:

The proposed investment of ₹10,000 crore by the Hinduja Group in IndusInd Bank, along with the increase in stake to 26%, showcases the Group's confidence in the bank's growth potential. IndusInd Bank's robust financial performance, highlighted by significant increases in net profit and net interest income, as well as improvements in asset quality, position it for continued success in the future. This strategic move is anticipated to have a positive impact on both IndusInd Bank and the Hinduja Group, fostering further growth and expansion opportunities in the banking sector.

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