RBI approves LIC to increase stake in IndusInd Bank
The stock witnessed a gap up post the announcement.
IndusInd Bank had opened with a gap up today as the bank had announced the approval granted by Reserve Bank of India (RBI) to Life Insurance Corporation (LIC), which is the current shareholder of IndusInd Bank, to increase its stake up to 9.99%. On December 10, the stock witnessed a gap up from the previous close of Rs 946.30 to open at Rs 960.
The insurance giant of the country, Life Insurance Corporation (LIC) currently holds 4.95% of the total issued and paid-up capital of the bank. With the RBI’s green signal for acquiring more stakes, LIC would be able to double its stake in the bank.
The stock fell in November from Rs 1140 to Rs 883.6. Analysts believe the poor communication in corporate governance matters and under-provisioning has led to the downfall in the stock. There had also been a technical glitch in the system wherein inadvertent disbursements were made to 84,000 accounts, without customer consent.
Nevertheless, the private lender recorded a robust financial performance in the quarter ended September. The net interest income stood at Rs 3,658 crore, which saw sequential growth of 3% and YoY growth of 12%. The net interest margin was stabilized at 4.07%. Total fee income was recorded at Rs 1,838 crore which again witnessed a growth of 3% QoQ and 18% YoY. The profitability was boosted to Rs 1,147 crore which saw a huge growth of 73% YoY and 13% on a sequential basis.
Commenting on the performance, Sumant Kathpalia, Managing Director & CEO, Induslnd Bank said: "The second quarter of this financial year witnessed economic activity gradually improving with easing mobility restrictions, rising pace of vaccination crossing one billion mark and supportive fiscal and monetary measures. The Bank too saw momentum across disbursements, deposits and connections.”
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