No plan to raise capital: IndusInd CEO

livemint.com:

MUMBAI : IndusInd Bank clarified on Tuesday that it has no plan to raise additional capital, despite its promoter, the Hinduja group, seeking to raise its stake in the bank.With a total capital adequacy of 18%, the bank believes it is well-capitalized and will not look at raising fresh capital unless the core equity capital falls below 14%. Currently, the common equity tier 1 capital (CET1) or a bank’s core capital stands at 16.44%.

“We have not had a capital discussion with the promoter because we are not planning to raise capital. We will maintain CET 1, and we will only raise capital only if capital adequacy if CET1 falls below 14%.

We are well capitalized with 16.5%, and we don’t see the need for any capital," said Sumant Kathpalia, chief executive officer of IndusInd Bank. Earlier this month, the Hinduja Group, in a press release, said that the group is looking to raise $1.5 billion to meet its twin strategic objectives, one of which is raising its stake in IndusInd Bank from the current 15% to 26%.According to an ET Now report, the Hindujas are looking to infuse ₹10,000 crore in the bank by the second half of the fiscal year.

This decision to increase its stake in the bank comes after the Reserve Bank of India gave an in-principle and conditional approval to IndusInd International Holdings last year to raise its stake in IndusInd Bank to 26%.The Hinduja group currently holds a 16.49% stake in the bank, with IndusInd International Holdings owing 12.57% and IndusInd Ltd holding a 3.93% stake as of the June quarter. IndusInd Bank declared its first quarter results on Tuesday, with net profit seeing a 30% jump on higher net interest income and lower provisions.