My Best Pick 2013

In safe hands

With its new team firmly in place, IndusInd seems poised to leap ahead of its competitors

Vishal Koul

For a bank owned by the Hindujas, the billionaire non-resident Indians, and inaugurated amidst great pomp by prime minister Manmohan Singh in 1994, IndusInd lost the plot in the subsequent decade as private sector peers, HDFC Bank and ICICI Bank, gained ground. By 2008, IndusInd was stuck in a rut with a business that was just fetching it 1.3% in net interest margin (NIM, the difference between the costs of borrowing and lending) and was saddled with bad loans . It was around this time that Ramesh Sobti, country head of ABN Amro Bank, joined the bank with his team. Since then it has been a remarkable turnaround for the bank, thanks to a team that came in at a time when the financial markets and banking system were roiling under the global credit crisis. 

Under the new management, the bank has seen quite a few rounds of capital raising that has resulted in the promoter’s stake falling from 28% in March 2007 to 17.4% and the paid-up capital rising from ₹319 crore to ₹522 crore as on date. But the growth that the bank has since managed has caught the eye of investors, with the market cap vaulting over 5 times from around ₹4,000 crore in early 2008 to a little over ₹22,000 crore today. The first phase was committed to identifying problem areas and turning around an entity languishing under highly stressed assets. This was achieved by streamlining and consolidating the business. That done, the next phase is now focuse

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