Ashok Leyland sells stake worth Rs 216.25 crore in IndusInd Bank

Will help the company reduce its debt which was at around Rs 3,500 crore

The commercial vehicle major Ashok Leyland has sold shares worth Rs 216.25 crore in IndusInd Bank Ltd (IBL). The disinvestment was a part of the company's plan to dilute its non-core assets, which will help the company reduce its debt that was at around Rs 3,500 crore. The company was planning to raise around Rs 500 crore over the next 12 months through stake sale.

According to BSE block deal data, the company has sold 50 lakh shares at the rate of Rs 432.5 a share. The shares were bought by Afrin Dia, a foreign institutional investor who had 79 lakh shares or 1.51% stake in the bank, as on December 31, 2012. Afrin Dia is a Mauritius based FII, according to reports.

It may be noted, that, earlier, Ashok Leyland had said it will partially or totally divest its stakes in various institutions, one which was IndusInd Bank, in which Ashok Leyland was holding 3.45% stake. Total shares held by Ashok Leyland as on December 31, 2012 in the Bank was 18.01 crore. These shares were worth around Rs 700 crore. IndusInd Bank Limited is a Mumbai based India new generation bank, established in 1994.

Other companies, in which Ashok Leyland was planning to dilute shares include Hinduja Leyland Finance (HFL), Albonair GmbH, Defiance Technologies and Defiance Testing.

The sale of investments in such companies should help Ashok Leyland raise around Rs 500 crore

Earlier the commercial arm of Hinduja Group, Ashok Leyland has diluted its stake in IBL and in ICICI and booked a profit of around Rs 75-76 crore during the current fiscal.

Earlier the company said, its long term borrowing level was around Rs 3,500 crore and in the next 2-3 months it will be increased to Rs 4,100 crore.

In the next fiscal the company has to repay around Rs 700 crore of debt and the company hopes the offloading will help the company to meet the target, said the company officials earlier.