IndusInd Bank promoters get a one-month extension to infuse remaining capital

Private sector lender IndusInd Bank has said that Securities and Exchange Board of India (Sebi) has granted Hindujas one-month, till February 04, 2021, to infuse balance capital Rs 2,021.45 in lieu of conversion of warrants, issued to them in 2019.

This amount forms 75 per cent of warrants, to be converted into the equity of the bank, of which the Hindujas are the promoters.

IndusInd Bank had issued convertible warrants to its promoters, IndusInd International Holdings ltd (IIHL) and its subsidiary IndusInd Ltd (IL) on July 6, 2019, under the composite scheme of arrangement for a total amount of Rs 2,695.26 crore for 1,57,70,985 share warrants.

The promoters had paid Rs 673.82 crore towards warrant subscription price, being 25 per cent of the warrant price of Rs 1,709 per share. An amount of Rs 2,021 .44 crores was to fall due on January 5, 2021, for the conversion of Warrants into equity shares.

In view of the present uncertain times due to disruption caused by the COVID-19 pandemic, the bank had, at the request of IIHL and IL, approached SEBI for extension in time for payment of balance amount, it added.

IndusInd Bank in a regulatory filing said, "Sebi has granted an extension of one month for a subscription to the warrants, i.e., until February 4, 2021, to complete the said conversion into equity."

The promoters in a letter to the bank have reiterated their commitment to the subscription to balance amount of warrants to complete the conversion into equity, the bank said in a separate filing.

The promoters have proven track record to have stood by the bank since its inception, especially capital infusion in difficult times, the letter stated. The promoters subscribed to convertible warrants at Rs 1,709 per share when the market was hovering at Rs 1,470 per share, the letter said.

"In the backdrop of COVID-19 pandemic, which disrupted business operations of entities across the world. Amongst many measures to safeguard the economy, RBI also extended moratorium. It's in this background we requested to seek an extension from Sebi for payment of balance amount of warrants, as acceded by them," the promoters stated in the letter.

The promoters would like to reiterate their confidence in the management and strength of the bank, and commitment to the subscription to balance amount of warrants conversion to the equity, it said.