Hindujas to sell 30% in IndusInd

The promoters of IndusInd Bank, the Hindujas, intend to offload around 30 per cent to three foreign banks located in west Asia, Europe and North America.

"We are talking to three banks -- one each from these three regions -- and an announcement to this effect is expected in the next six months," explained Pravin Batra, vice-president and head of corporate banking. At present the promoters hold around 41 per cent stake in the bank.

"The idea is to offload at most 10 per cent to each of these banks in a manner that there is no change in the management structure and control of the bank. The scheme offered by us to these banks include offloading stake along with strategic tie-up. That will allow us to market a few of our products to through these banks," explained officials from the bank.

"The extent of offloading that actually happens will however depend on the deals we strike with each of these banks and the total stake being offered to these entities as a whole," explained the officials.

Although Batra declined to name the banks, he said, "We are looking at strong regional players with wide presence in these countries, but without any presence in India."

Area of operation through the tie-up would include correspondence banking, tie-up for delivery of products, and acting as a window to IndusInd Bank in these countries.

"Stake being offered to foreign entities will however have to be in sync with RBI guidelines which could be announced by then," explained officials.

In a parallel development, the bank, which had firmed up plans of floating an equity trading company, now intends to hold around 30 per cent in the entity. Some of it would also be offered to Hinduja group companies such as Ashok Leyland. A portion of the stake would also be available to the public.

Meanwhile, IndusInd has firmed up plans of converting 132 branches of Ashok Leyland Finance Ltd (ALFL) to full fledged bank branches that would provide the company a wider coverage.

"We have applied to RBI for the conversion," explained Soumyadip Chowdhury, vice-president. The rest of the ALFL branches would be merged with other branches.

On the business front, the bank has targeted a Rs 20,000 crore (Rs 200 billion) business this year and would possibly raise Rs 100 crore (Rs 1 billion) of Tier-II capital next fiscal year.