Leyland lowers IndusInd Bank stake by 2.8%

Ashok Leyland has further offloaded 2.8 per cent stake in IndusInd Bank, bringing down its stake in the bank from 16 per cent to 13.2 per cent.

This move has come in the wake of a RBI directive that no single corporate entity can hold more than 10 per cent in a bank.

Earlier in February, Ashok Leyland had sold 2.5 lakh shares of the bank.

"Ashok Leyland's intention is to divest the remaining 3.2 per cent stake in the bank before June at the right price," said K Sridharan, executive director, Ashok Leyland Ltd.

"We have kept our options open and, at present, we have no plans to bring down our stake below 10 per cent in the bank," he added.

Ashok Leyland held 75 per cent stake in Ashok Leyland Finance (ALF). Following its merger with IndusInd Bank in June last year, it acquired a 15.3 per cent stake in the bank. Going by the RBI norm on ownership in private sector banks, Ashok Leyland needs to pare its stake in IndusInd Bank to 10 per cent by June 2005.

In a related development, IndusInd International Holdings Ltd (IIHL), a Mauritius-based company, has applied to the RBI seeking permission to increase its stake to 40 per cent from the current 31.3 per cent in the bank, said banking sources. Hindujas are the major shareholders in IIHL.

This is in the light of the new draft guidelines, which states that a decision on the promoter's holding will be considered taking into account the licensing agreement. In 1994, the banking license was handed by the finance ministry to the IndusInd Enterprise Finance Ltd (IEFL) and IIHL.

According to the agreement, IIHL and IEFL were permitted to hold 49 per cent stake in the bank, said banking sources.