Private lender IndusInd Bank on Thursday said it has raised Rs 2,021 crore of common equity capital through conversion of preferential warrants issued to the Promoter entities - IndusInd International Holdings Limited (IIHL) and IndusInd Limited (IL). The warrants were issued as an integral part of the merger with Bharat Financial Inclusion Limited in July 2019. The Promoter entities had paid Rs 673 crores at the time of subscription to the warrants and the balance amount of Rs 2,021 crore was paid today, the lender said in an exchange filing.
"The finance committee of the bank today approved allotment of 1,57,70,985 shares to the Promoter entities," it said in a filing to the BSE.
The warrants were converted at a price of Rs 1,709 per share reflecting a premium of 65 per cent over the closing price on February 17, 2021. On Wednesday, IndusInd Bank's shares ended at Rs 1,032.60.
The bank said that its capital adequacy ratios were further bolstered with fund infusion from the promoter entities. The capital adequacy ratio, the ratio of a bank's capital to its risk, including 9M FY21 profits was at 16.93 per cent as of December 31, 2020 and this will get augmented to approximately 17.68 per cent with this capital inflow.
Earlier in September 2020, the private bank completed preferential issues of equity capital of Rs 3,288 crore and this was subscribed by the promoter as well. Together with current warrants conversion, the bank has raised Rs 5,309 crore of equity capital during the financial year 2020-21.
On the successful conversion of the preferential warrants, Sumant Kathpalia, Managing Director and CEO of IndusInd Bank said, "The conversion of warrants at a significant premium reflects strong commitment of the Promoter entities to the Bank. With this capital raise and continued economic recovery, the Bank is well positioned to execute our strategy of "Scale with Sustainability". I thank the Promoters for their steadfast belief in the management and supporting the Bank in every opportunity for capital contribution."
Boosted by the development, shares of IndusInd Bank ended Thursday's trade at Rs 1,046.45, up 1.34 per cent, on the BSE.
By Chitranjan Kumar