IndusInd Bank parent to pick up 50% in tech arm

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 per 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.

Speaking on future plans, IndusInd Bank managing director Bhaskar Ghose said the bank's retail portfolio will register an incremental growth of Rs 3,000 crore in 2004-05.

In percentage term, the retail portfolio would account for 40-45 per cent of the bank's books in the financial year 2005, he added.

The bank expects to end the financial year 2004 with deposits and advances in excess of Rs 10,000 crore and Rs 6,000 crore, respectively.

The net interest margin of the bank is expected to increase to 4.5-4.7 per cent by the end of 2005. The cost of fund for the bank is expected to dip to around 4.75 per cent, he added.

On the merger of Ashok Leyland Finance Ltd (ALFL) with the bank, Ghose said that ALFL is active in two-wheeler and commercial vehicle financing where the interest margin is high in the range of 16-18 per cent. This, according to him, will add to the bank's net internal margins. The combined balancesheet will add to the quality of the bank's assets portfolio, he said.

Road transport operators and other segments of ALFL's lending portfolio will help it shore up its priority sector lending with higher margins, he added. The synergy, he said, is ideal since there is little overlap between the products offered by ALFL and those offered by the bank. At present the bank has 62 branches and it plans to add 14 branches before June.

ALFL has a network of 150 branch offices and 450 marketing offices which will now be a part of IndusInd.

IndusInd does not have a presence in 136 centres where ALFL has offices. The bank will thus double the number of outlets in the coming months.

The bank will continue to pursue inorganic growth in a big way through the merger route, said Ghose.