IndusInd Bank has plans to expand its business beyond banking and foray into para banking - or additional activities such as mutual funds and broking that are performed by a lender apart from its day-to-day operations.

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Hinduja group holding company IndusInd International Holdings Ltd (IIHL) has formed a mutual fund joint venture in India with Invesco, a US-based investment management company. Contours of the deal suggest that while Mauritius-headquartered IIHL will hold a 60 per cent stake in the JV, the remaining 40 per cent will be owned by Invesco.

Now, many corporate governance experts are of the view that the move by IndusInd promoters to buy Indian assets directly through its Mauritius-based entity may not be in the best interests of the lender's minority shareholders. 

Proxy advisory firm InGovern's Founder, Shriram Subramanian, told Zee Business that the move by IndusInd Bank promoters to buy stake in the joint venture through IIHL is "not right" for minority shareholders.

 

"IIHL is a holding company based out of Mauritius... Although promoters are saying that IndusInd is buying the stake (in JV) directly, it is not so... It is the Mauritius-based holding company that is purchasing it," said Subramanian.

As of March 31, while promoters held a 16.40 per cent stake in IndusInd Bank, the remaining 83.6 per cent stake remained with public shareholders. Among the lender's promoters, IIHL held a 12.49 per cent stake. 

At the time of publishing this story, email queries sent by Zee Business to IndusInd Bank and IIHL remained unanswered.