Money & Banking

IndusInd Bank says it is well-capitalised

Our Bureau Mumbai | Updated on March 18, 2020 Published on March 18, 2020

Stock closes 23.9% lower at ₹459.85 apiece

IndusInd Bank scrip fell by over 23 per cent on Wednesday amid investor concerns over small and mid-sized private sector lenders in the wake of the YES Bank crisis.

IndusInd Bank stock plunged by over 30 per cent in intra-day trade on the BSE and closed 23.9 per cent lower at ₹459.85 apiece. In a statement, the bank dispelled market rumours and speculation around the stock and stressed on its strong fundamentals, saying it is well-capitalised, profitable, and a growing entity with strong governance.

“We expect our net non-performing asset of 1.05 per cent as of the last quarter to fall below 1 per cent, in line with our ambition to take provision cover beyond 60 per cent,” it said.

The bank also clarified on sector-related speculation and said it had zero gross NPAs in real estate developer (commercial and residential) book and gems and jewellery financing portfolio at the end of February 2020.

Quoting reports that relief measures for the telecom sector are under the process of approval, it added: “This is a significant positive step and we await further decisions and details in this matter.”

The bank also said the promoter has sought RBI approval to increase shareholding to 26 per cent and is awaiting further guidance on this.

“Promoter has already informed the exchange about the simultaneous release of non-disposal undertaking with the creation of a pledge in relation to 23.8 million shares of the bank. No new borrowing was undertaken and was merely a formalisation of a three-year-old arrangement.

“The money was originally raised to make an overseas acquisition, which did not fructify – the pledge is a small fraction of promoter holding in the bank,” it further said.

Published on March 18, 2020
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