Private equity major General Atlantic has increased its stake in Hindujas-promoted IndusInd Bank by acquiring another 1.4 per cent stake during the Oct-Dec quarter from the open market for over Rs 150 crore ($30 million), according to VCCircle estimates.
General Atlantic started to buy into IndusInd earlier in 2011, increasing its stake from 1.31 per cent in March to 1.69 per cent by June and then to 3.4 per cent in September. With the latest transaction, its stake in the private bank has gone up to more than 4.85 per cent.
IndusInd Bank scrip hit a new high on Friday and last traded at Rs 319.3 a share, up 3.47 per cent in a weak Mumbai market.
At this price, General Atlantic’s stake is worth over Rs 700 crore ($140 million). It had started buying into the company when the share price was around Rs 220. Therefore, it is now sitting on a neat profit in its one-year-old investment.
Norwest Venture Partners is another PE investor in the bank with 1.44 per cent stake.
In September 2010, IndusInd raised $253 million through a qualified institutional placement at a price of Rs 234.55 a share. This came just a year after the firm had raised around $100 million through a similar placement of shares to institutional investors at a price of Rs 87.5 per share.
Last April, IndusInd Bank struck a deal to acquire Deutsche Bank’s loss-making credit card business in India for an undisclosed sum.
Private banking space has seen a string of private equity investments and exits in the recent past. For instance, Warburg Pincus part-exited Kotak Mahindra Bank in a deal worth Rs 857 crore; Carlyle sold over a fourth of its stake in mortgage lender HDFC for Rs 1,355 crore and Temasek sold 1.4 per cent stake in ICICI Bank for $300 million.
In the previous quarter, world’s largest sovereign wealth fund Abu Dhabi Investment Authority (ADIA) and the Singapore government acquired shares worth $650 million in HDFC Bank Ltd, the country’s most valued private lender.