Hedge fund Route One Investment Co. will be doubling its stake in IndusInd Bank Ltd. to 10%, the private sector lender said on Friday.
The hedge fund has received a nod from the Reserve Bank for the same, the bank said, without specifying how and by when the stake would be increased.
The move comes at a time when a slew of lenders, especially the private sector ones, have started efforts to bolster their capital reserves by raising new capital fearing a spike in non performing assets because of the Covid-19 pandemic.
Route One, which owns a 4.96% stake in the bank, had approached the RBI to increase the stake to 10% in accordance with the master directions and the central bank made a reference on the same to IndusInd, it said.
At its meeting on July 5, the bank's board granted its approval for the proposal.
Friday's intimation from IndusInd Bank said the RBI has forwarded it a copy of the letter addressed to the hedge fund granting approval for increasing their shareholding up to 10% of the paid-up voting equity capital.
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