Leyland Finance MD to be IndusInd DMD, post-merger

S Nagarajan, managing director of Ashok Leyland Finance Ltd (ALFL), is likely to take over as the retail head and deputy managing director of IndusInd Bank after ALFL's merger with the private sector bank. At present J K Basu heads the retail division at the bank.

Bhaskar Ghose, managing director, IndusInd Bank, declined to confirm the development but hinted that Nagarajan would be offered a senior position in the bank when the court approves the merger which is expected by April end.

Though ALFL will be merged with the bank, there will be no retrenchment of employees, Ghose said. "The bank will continue to work as a lean organisation. The client base of ALFL is different and hence we would need their employees to retain the five lakh customers that ALFL would bring to the bank," he said.

The bank has an employee strength of 950. With the merger, the additional 750 employees of ALFL will be added to its payroll.

"The bank has no plans of getting into a major recruitment drive. However, we will hire around 200-300 people across the country in the coming months," said Ghose. If need be, the redeployment of the existing employees is also possible, he added.

The bank is hopeful of converting ALFL's customer base, especially those in the semi-urban and rural areas where it did not have a presence. ALFL has a strong presence in the south and eastern regions of the country.

IndusInd Bank on March 19 had received the shareholders' approval for its proposed merger with ALFL. Post-merger, IndusInd Bank will have an authorised capital of Rs 300 crore and issued capital of Rs 290.7 crore. The merged entity asset base will be over Rs 15,000 crore (augmented by Rs 3,000 crore through the merger). The merger ratio is 9:4, which means an individual holding four shares of ALFL will be allotted nine shares of IndusInd Bank.

After the merger, foreign promoters' holding in the bank will be 31.30 per cent, public 31.74 per cent, foreign institutional investors 4.39 per cent, banks, financial institutions and insurance companies 1.20 per cent, non-resident and overseas corporate bodies other than foreign promoters 5.03 per cent and private corporate bodies around 25.03 per cent.

The stake of private bodies will include the 15.27 per cent holding of Ashok Leyland "" the main promoter of ALFL.