General Atlantic has picked around 0.6% stake in Hindujas-promoted Indusind Bank for Rs 67 crore ($14.5 million) through open market purchase on Monday. Indusind is backed by names such as Abu Dhabi Investment Authority, touted to be the world’s largest sovereign wealth fund besides Norwest Ventures.
The private equity firm that recently exited its decade-long investment in IT services firm Patni Computer acquired the shares at Rs 218.87 per share. Indusind scrip closed at Rs 219.55, 1.5% higher than the previous closing.
General Atlantic that also counts amongst its Indian investments names such as Hexaware Technologies, Infotech Enterprises Ltd, IBS Software Services Pvt Ltd, Genpact, National Stock Exchange and Jubilant Organosys Ltd had last year participated in a consortium of private equity investors who together put in $425 million in Asian Genco, a Singapore-based company with power generation assets in India and engineering services businesses in March 2010.
The PE firm could be betting on further opening of the Indian financial sector specially opportunities in private banks in the coming years.
Indusind had last September raised $253 million through a qualified institutional placement at a price of Rs 234.55 per share. This came just about one year after the firm raised around $100 million through a similar placement of shares to institutional investors at a price of Rs 87.5 per share.
The banks generates bulk of its business from retail banking(within retail banking much of its lending is focused on commercial vehicles including that sold by group firm Ashok Leyland) and had churned out net profit of Rs 350 crore for the year ended March’10. Indusind is among the smaller private sector banks in the country but has strong parentage.
The UK-based Hinduja family also has a separate investment banking business and is also the promoter of Hinduja Bank(Switzerland) Ltd. The group had last year acquired Luxembourg-headquartered KBC Group’s banking subsidiary KBL for €1.35bn ($1.65 billion) to get better access to the fast-growing Middle East, Indian and Asian markets. The group was also scouting for other potential merger and acquisition targets. Earlier in 2010, the group had also bought Banca Commerciale Lugano to strengthen its presence in the private banking space.