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IndusInd Bank Raises $361 Million in Share Placement

IndusInd Bank CEO Sobti
Romesh Sobti, chief executive officer of IndusInd Bank Ltd. Photographer: Dhiraj Singh/Bloomberg

Nov. 27 (Bloomberg) -- IndusInd Bank Ltd., the lender backed by India’s billionaire Hinduja brothers, will raise 20 billion rupees ($361 million) from a share sale to institutions, according to two people with direct knowledge.

The company is pricing shares in a so-called qualified institutional placement at 384 rupees after receiving bids for at least $1 billion worth of shares, the people said, declining to be named before an official announcement. The 52.1 million shares were offered to investors in a range of 375 rupees to 384 rupees apiece, terms obtained by Bloomberg News showed.

After gaining as much as 3.9 percent earlier, its largest increase since March, IndusInd was up 2.5 percent at 394.1 rupees at the close in Mumbai today.

The fund-raising by Mumbai-based IndusInd, whose shares have risen more than 70 percent this year, was approved at the company’s annual meeting in July. The company is considering raising funds to bolster its capital base, Chief Executive Officer Romesh Sobti said on a Oct. 10 conference call.

Paul Abraham, IndusInd’s chief operating officer, didn’t reply to an e-mail and phone call to his office seeking comment on the sale yesterday.

The lender’s so-called Tier 1 capital ratio, a measure of a bank’s financial strength, fell to 11.4 percent by March 2012, from 12.3 percent a year before, data compiled by Bloomberg show. The lender had a Tier 1 ratio of about 11 percent at the end of September, Sobti said on the October call.

JM Financial Services Pvt., HSBC Holdings Plc, Morgan Stanley and CLSA Asia-Pacific Markets are managing the sale, people with knowledge of the matter said yesterday, asking not to be identified as the information is private.

To contact the reporters on this story: George Smith Alexander in Mumbai at galexander11@bloomberg.net; Ruth David in London at rdavid9@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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