India-based private sector lender IndusInd Bank is planning to raise over $500m to shore up its balance sheet as it grapples with bad loans.
The bank registered a 16% year-on-year drop in net profit at INR30.1bn ($401m), which lead to a 56% rise in bad loan provisions to INR244bn ($3.24bn).
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Its stock prices also plunged to more than 70% since the beginning of 2020.
The bank, which is backed by Hinduja Group, is in talks with three strategic investors, including Japan’s Nippon Life for the fundraising.
According to sources, Nippon Life needs a bancassurance partner to boost its distribution network of insurance products in India.
It also intends to bag huge corporate treasury cash for its asset management business in the country.
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By GlobalDataHowever, the preliminary talks with Nippon may or may not result in a successful transaction.
The other potential strategic investors include Canada Pension Plan Investment Board (CPPIB), and Singapore’s GIC.
A person familiar with the matter told financial daily Livemint: “They are in discussions with at least three groups including Nippon Life and a major financial institution from Europe for the fundraiser.
“These talks are at an initial stage and no non-binding bids have been submitted yet by these strategic investors.”
Initially, the bank sought funds from private equity (PE) and pension funds and sovereign investors, however, it did not receive much traction.
