IndusInd Bank shares gained 1.6 percent to Rs 1,507 apiece on May 6 after reports suggested that promoter company IndusInd International Holding (IIHL) will raise its stake in the lender to 26 percent from 16 percent in multiple tranches over the next two weeks.
IndusInd International Holding (IIHL), the investment arm of the Hinduja Brothers, received the Reserve Bank of India's nod to hike its stake in IndusInd Bank to 26 percent. This means that IIHL will need to infuse a little over Rs 11,500 crore for an additional 10 percent stake in the lender.
So far this year, the stock of IndusInd Bank has declined 5 percent, underperforming a 3 percent rise in the benchmark Nifty 50 index.
In April last year, RBI had given in-principle approval to IIHL to increase its stake in the bank to a maximum of 26 percent.
IndusInd Bank reported a 15 percent YoY rise in net profit to Rs 2,347 crore in Q4FY24, while its net interest income rose 14 percent YoY to Rs 5,376 crore. The bank's net interest margin contracted to 4.26 percent in Q4FY24 from 4.29 percent a year back.
Following Q4 results, analysts at Kotak Institutional Equities retained a 'buy' rating on IndusInd Bank and issued a target price of Rs 1,800. They believe that the bank has delivered an excellent price appreciation in the past year at a time when interest rates were trending higher.
JM Financial, too, maintained its 'buy' rating on the lender, with a target price of Rs 1,900 per share. "IndusInd Bank trades at attractive valuations of 1.4x price-to-book (PB) FY26E and as the bank continues to invest in technology, it remains well-positioned for sustained growth across product cycles," they noted.
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