IndusInd Bank: Promoters will infuse capital into bank if and when required, says Ashok Hinduja

Ashok Hinduja, chairman of IndusInd International Holdings Ltd (IIHL), stated that if necessary, the promoters are willing to inject capital into IndusInd Bank. However, at the present time, the bank's capital adequacy level is satisfactory and there is no immediate requirement for additional funds. IIHL, which holds a 15% stake in IndusInd Bank, has not been approached by the bank for additional capital.

Hinduja emphasized that this is an opportune moment for the promoters to bolster the bank's capital base, especially in light of the recent decrease in the bank's share value following the revelation of discrepancies in the derivative portfolio last week. These discrepancies could potentially impact the bank's net worth by more than 2%.

Last week, IndusInd Bank, India's fifth largest bank, announced a substantial accounting error uncovered during an internal audit of forex derivative transactions.

The investigation uncovered a discrepancy of Rs 1,575 crore (post-tax), representing about 2.35% of the bank's net worth as of December 2024. As a result of this revelation, IndusInd Bank's shares plummeted by 27% last Tuesday, hitting a new 52-week low.

IIHL has obtained initial approval from the Reserve Bank of India (RBI) to increase its ownership in the bank from 15% to 26%. Final approval from the regulator is still pending.

Hinduja stated that all necessary information has been provided to the regulator, and now it is up to them to determine the timeline and process for granting approval.

“All communication responses have been given to the regulator. It is now left to the regulator to decide when and how they will give us approval,” Hinduja said.

The Reserve Bank of India (RBI), in a statement on March 15, addressed speculation regarding IndusInd Bank, confirming that the institution is financially stable and well-capitalised.

The banking regulator noted that IndusInd Bank reported a Capital Adequacy Ratio of 16.46% and a Provision Coverage Ratio of 70.20% for the quarter ending December 31, 2024. As of March 9, 2025, its Liquidity Coverage Ratio was 113%, surpassing the regulatory requirement of 100%.

The RBI advised against reacting to speculative reports and reassured customers that IndusInd Bank's financial standing is satisfactory and being closely monitored by regulatory authorities.

The bank, in which IIHL holds a 15% stake, has engaged PwC as an external auditor to examine the discrepancies in its derivative dealings. The credibility of the bank, which suffered after the announcement of these discrepancies, now hinges on the outcome of PwC's report.

Following the RBI's assurance, IndusInd Bank shares surged 5.58% on Monday to a day’s high of Rs 709.90 on NSE.

On Tuesday, Shares of IndusInd bank Ltd closed at Rs 681.70, up by 0.70%.