IndusInd tech arm plans IPO

IndusInd Information Technology Ltd (IITL), the subsidiary of new generation private sector IndusInd Bank, is planning to hit the market next year. The company will float its initial public offer (IPO) next year if gets a good valuation, said Bhaskar Ghose, managing director of the bank.

The tech arm posted a net profit of around Rs 60 lakh in fiscal 2003-04 against Rs 18.38 lakh in the previous fiscal and a loss of Rs 1.45 crore in 2002.

So far, it has been largely working as a backoffice of the bank. In the current fiscal, the company has generated external business. However, it has largely concentrated on supporting IT intiatives of the bank, said G P V Rao, senior vice-president and CIO, IndusInd Bank.

Ghose made it clear that the IPO would hinge on its profitability and "we have to get a good valuation," he said.

The tech arm is also providing technological services to certain leading public and private sector banks, he added.

The company is in negotiation with some co-operative banks to provide them technological assistance to implement RTGS. IndusInd Bank had launched IndusAim its RTGS product in April.

The focus of the company will be to provide technical expertise to financial institutions (FI) and also outsource services to other banks and FI said IndusInd Bank, managing director, Bhaskar Ghose.

On the dilution of the bank's stake in the company, Ghose said the bank is awaiting the Reserve Bank of India's approval. The Mauritius-based IndusInd International Holding Ltd (IIHL) will pick up 50 per cent stake in IndusInd Technologies Ltd, a subsidiary of the private sector IndusInd Bank.

IIHL will acquire the shares from IndusInd Bank for Rs 1.15 crore at Rs 11.50 a share. The bank, at present, holds 80 per cent stake in IndusInd Technologies. IIHL is the majority shareholder in IndusInd Bank.

S V Zaregaonkar, executive vice-president and chief financial officer, IndusInd Bank, said after the stake sale the bank's holding in IndusInd Technologies will come down to 30 per cent, IIHL will hold 50 per cent and Hinduja TMT 20 per cent.