Route One Investments, a hedge fund based out of the US is in talks with IndusInd Bank to place a stake and strengthen its Balance Sheet. Route One already holds 5.41% in IndusInd Bank. It may look to hike its stake in IndusInd Bank to around 9.9%. A 10% stake in IndusInd Bank would be valued at Rs.3650 crore. Route One has already got RBI approval.

This stake sale is significant, when it happens, because the promoter Hinduja Group is also keen to hike stake in IndusInd Bank to 26% from the current 14.34%. This would be a welcome change for IndusInd Bank as the shares are 64% lower although it has bounced after correcting close to 90% post the Yes Bank crisis in March this year.

However, the bank has been non-committal about any further dilution of equity at this point time as its capital adequacy ratio or CAR is fairly comfortable at 15.43%. Even as net advances have been under pressure and NPAs have been on the higher side, IndusInd Bank has the structural advantage of a reasonable 40.2% CASA ratio.