IndusInd gets nod to buyout Leyland Finance

IndusInd Bank has received shareholders' approval for its proposed acquisition of Ashok Leyland Finance Ltd (ALFL).

The shareholders' nod for the acquisition was received at the bank's extraordinary general meeting held on Friday.

Earlier, on March 16, the shareholders of ALFL had given their approval for the merger of the non-banking finance company with the bank at its annual general meeting held at Chennai.

"With the proposed merger of ALFL, the bank's net worth is likely to cross Rs 1,000 crore. The improved financial strength of the bank and its healthy balance sheet will help further in enhancing the opportunities for further acquisitions," said Bhaskar Ghose, managing director and chief executive officer, IndusInd Bank.

The new private sector bank will have a total asset base of over Rs 15,000 crore (augmented by Rs 3,000 crore through the merger). Post-merger, IndusInd Bank will have an authorised capital of Rs 300 crore and an issued capital of Rs 290.7 crore.

The merger ratio is 9:4, which means an individual holding four shares of ALFL will be allotted nine shares of IndusInd Bank.

The shareholding will be split between foreign promoters (31.30 per cent), the public (31.74 per cent), foreign institutional investors (4.39 per cent), banks, financial institutions and insurance companies (1.20 per cent), non-resident Indians/overseas corporate bodies other than foreign promoters (5.03 per cent) and private corporate bodies (25.03 per cent), of which Ashok Leyland (the main promoter of ALFL) will hold a 15.27 per cent stake.

Suresh Pai, executive vice-president, IndusInd Bank, said the merger will help the bank push towards becoming a significant retail bank.

"At present IndusInd Bank has 58 branches and we plan to increase the number to 100 by 2005," he said.