Mumbai: IndusInd Bank on Monday debuted on the stock market barometer index Nifty amid strong buying interest among investors that pushed its share price higher by about 3% in an otherwise lacklustre market.
IndusInd Bank and state-run mining firm NMDC replaced IT firm Wipro and diversified group Siemens on the 50-share benchmark index of the National Stock Exchange (NSE) on Monday morning.
While NMDC shares failed to generate investors’ interest and its stock price fell by about 2% to Rs.135, IndusInd Bank shares soared by nearly 3% to Rs.415.70 on the NSE.
Following their exit from Nifty, shares of Wipro and Siemens fell by 1.9% and 3.5%, respectively. In a lacklustre overall market, Nifty closed 0.38% up.
An ‘opening bell´ ceremony was held at the NSE here to commemorate the inclusion of NMDC and IndusInd Bank in Nifty.
One of the country’s first next-generation banks, IndusInd Bank got a banking licence along with eight other banks in 1994, when Manmohan Singh was the country’s finance minister. Out of those nine banks, only five are left now and other four had to be merged with others due to reasons including weak promoter base and financial problems.
The Reserve Bank of India (RBI) is currently in the process of granting new banking licenses, when Manmohan Singh is serving as the country’s Prime Minister.
Speaking to PTI after the ‘opening bell´ ceremony, IndusInd Bank’s promoter holding firm IndusInd International’s director Ashok Hinduja told PTI that he welcomes competition and India is a huge market with enough place for more players. When asked how many new players he expected in the banking space, Hinduja said it was the prerogative of RBI on how many licences it wants to grant and therefore he would not be able to comment on that.
In reply to another question on whether the conditions are tougher today for grant of licences, he said the conditions were indeed more stringent and difficult, as a result of which only a few entities might get the licence. “However, I welcome competition. India is a huge market and there is huge potential in the country, especially in rural areas, for expansion of banking services. More competition would certainly bring better management practices and innovation for the benefit of the sector and the consumers,” Hinduja said.
IndusInd Bank was set up in 1994 by NRI industrialist and Hinduja Group chairman S.P. Hinduja along with hundreds of NRIs and other shareholders and its promoter holding currently stands at about 15%, in line with the RBI guidelines. “We will always abide by the RBI guidelines on promoter holding in a bank. However, our request to the RBI is that if the promoter group is strong in a bank, it fare better in times of slowdown. We have seen in the past that how banks had to be merged with others due to weak promoter bases,” he said.