Indusind Bank Shares In Focus: Setback For Promoters As Shareholders Vote Down Board Induction Plan

IndusInd Bank's shareholders have rejected a proposal to induct two nominee directors to the board, with 54.04% voting against an amendment to the bank's articles of association. The setback came despite prior approval from the Reserve Bank of India (RBI) and the bank's board.

At the time of writing, IndusInd Bank shares were up 1.27% at ₹748.9.

According to an official release post-market hours on Friday, the bank's AGM details showed that only 45.96% voted in favor of the resolution. However, investors cleared the appointment of Rajiv Anand as Managing Director and CEO.

The promoter entity, IndusInd International Holdings (IIHL), reportedly expressed disappointment over the rejection.

“We understand that the said resolution in the IndusInd Bank AGM was not carried through, although the proposed resolution complied with applicable laws and governance practices,” IIHL President and CEO Moses Harding said.

Harding added that proxy advisors had raised objections, which he termed a misinterpretation, and stressed that IIHL would work with stakeholders to address these concerns in line with RBI's approval.

The CEO underscored IIHL's long-standing support for IndusInd Bank without seeking board representation. He highlighted past contributions, including subscribing to 1.57 crore warrants in 2021 at ₹1,709 per share, which was well above the market price at the time. He also cited IIHL's backing during the 2008 financial crisis and the COVID-19 pandemic.

Over the years, IIHL has reduced its stake in IndusInd Bank to around 15%, down from more than 90% in 1994, in line with the RBI's ownership norms. The promoter has now sought approval to raise its holding to 26 percent, aligning with the RBI's acceptance of the Internal Working Group's recommendations.

The stock has declined nearly 22% so far this year.

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