IndusInd Bank debuts on Nifty, shares soar 3 per cent
BT Online Bureau April 1, 2013IndusInd Bank made its debut on the stock market barometer index Nifty on Monday, amid strong buying interest among investors that pushed its share price higher by about 3 per cent in an otherwise lacklustre market.
IndusInd Bank and state-run National Mineral Development Corporation (NMDC) replaced IT major Wipro and diversified group Siemens on the 50-share benchmark index of National Stock Exchange (NSE) on Monday morning.
While NMDC shares failed to generate investor interest and its stock price fell by about 2 per cent to Rs 135, IndusInd Bank shares soared 2.72 per cent to Rs 415.70 at NSE.
One of the country's first next-generation banks, IndusInd Bank got a banking licence along with eight other banks in 1994, when Manmohan Singh was the country's finance minister.
Of those nine banks, only five are left now and other four had to be merged with others due to reasons including weak promoter base and financial problems.
Speaking after the 'Opening Bell' ceremony, IndusInd Bank's promoter holding firm IndusInd International's Director Ashok Hinduja said India is a huge market with enough place for more players and welcomed competition.
When asked how many new players he expected in the banking space, Hinduja said it was the prerogative of the Reserve Bank of India (RBI) on how many licences it wants to grant and therefore he would not be able to comment on that.
In reply to another question on whether the conditions are tougher today for grant of licences, he said the conditions were indeed more stringent and difficult, as a result of which only a few entities might get the licence.
"However, I welcome competition. India is a huge market and there is huge potential in the country, especially in rural areas, for expansion of banking services. More competition would certainly bring better management practices and innovation for the benefit of the sector and the consumers," Hinduja said.
IndusInd Bank was set up in 1994 by NRI industrialist and Hinduja Group Chairman S P Hinduja along with hundreds of NRIs and other shareholders and its promoter holding currently stands at about 15 per cent, in line with the RBI guidelines.
"We will always abide by the RBI guidelines on promoter holding in a bank. However, our request to the RBI is that if the promoter group is strong in a bank, it fare better in times of slowdown. We have seen in the past that how banks had to be merged with others due to weak promoter bases," he said.
In a lacklustre overall market, Nifty closed 0.38 per cent up.
with inputs from PTI