Despite financial crunch and recent irregularities in debt servicing affecting Infrastructure Leasing & Financial Services’s (IL&FS) image, IndusInd Bank is keen on moving ahead with its proposed IL&FS Securities acquisition.

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On June 26, the bank had signed a definitive share purchase agreement to acquire 100% of IL&FS Securities Services Ltd (ISSL), an IL&FS subsidiary specialising in the capital markets business.

The indicative three month time period for completion of the proposed acquisition ends this month.

“We have received RBI (Reserve Bank of India) approval for the acquisition. We still await certain additional regulatory approvals. Once they are received, the transaction closure can be expected immediately,” IndusInd Bank told DNA Money.

When asked about fiasco surrounding the IL&FS group, the bank said ISSL is specialised and independent business activity involved in capital markets and not connected with infrastructure.

“As of date, we expect our acquisition to proceed as per plan,” the bank said.

ISSL, incorporated in 2007, reported a revenue of Rs 324.5 crore in the last financial year, down from Rs 342.65 crore in FY17.

The firm’s profit after tax in the same period stood at Rs 45 crore, down from Rs 51 crore a year ago.

It is a leading capital market intermediary for professional clearing, depository and custodial services.

ISSL is majorly owned by IL&FS and has some minority shareholders.

IndusInd Bank has not disclosed the deal value but has only shared that it would be a cash transaction.

The acquisition was first announced on March 14 last year but has not been completed so far.

Section 12A introduced through an ordinance on June 6 says, “The Adjudicating Authority may allow the withdrawal of application admitted under section 7 or section 9 or section 10, on an application made by the applicant with the approval of 90% voting share of the committee of creditors, in such manner as may be prescribed”.

Dismissal of bankruptcy proceedings against OMDC would augur well for parent Rashtriya Ispat (RINL), which is now planning to come out with its initial public offering next year.

Source: DNA Money