MUMBAI: The Hindujas will pump another Rs 2,700 crore into IndusInd BankNSE 0.61 % through a warrant issue to ramp up the promoter holding after the merger of Bharat Financial. “Our promoters will infuse Rs 2,700 crore to get their stake back to 15 percent, strategy head at the bank,” said Sanjay Mallik, strategy head at IndusInd Bank. He said a fourth of the money will come immediately after the merger, while the rest will come over the next 18 months. The promoters will be subscribing to the w ..
Merger of Bharat Financial into Indusind Bank was announced in October 2017, as part of which a shareholder would get 639 shares of Indusind Bank for every 1,000 shares of the micro-lender.
The merger and subsequent promoter infusion will push the capital base by $1 billion, he said, adding the capital buffers will increase by 3 percentage points through this.
The fund infusion will expand the net interest margin by over 0.30 per cent, and also help from a return on assets and return on equity perspectives, he said.
The margin of the micro-lender is at least three times of the bank. Considering that Bharat Financial will constitute 7 per cent of the bank balance sheet post-merger, our margins will go up by 0.30-0.40 per cent, Mallik said.
Mallik said the merger will help the micro-lender save up to 3 percentage points on its cost of funds because of the access to cheaper deposits after the merger.
He said nearly all of the 20 financial institutions from where Bharat Financial had borr ..
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