IndusInd Bank Obtains 4.79% Stake in McLeod Russel

On Wednesday, 29 September 2021, private sector financial institution IndusInd Bank declared the acquisition of 50,00,000 pledged McLeod Russel India Ltd. (MRIL) shares. These 50,00,000 shares comprise about 4.79% of McLeod Russel’s paid-up capital in terms of equity shares.

Ichamati Investments Ltd had earlier pledged MRIL’s equity shares to IndusInd Bank to secure the tea manufacturing company’s outstanding dues.

Know About the Companies

McLeod Russel India Ltd. became a legal corporation in 1998, with Kolkata as its headquarter. It is a tea manufacturing and cultivation company owning two tea estates in Dooars, West Bengal and 31 in Assam. In addition, MRIL has three of its factories in Vietnam and six tea estates in Uganda.

As of 31 March 2021, the company’s net worth was Rs. 1,619.04 crores. Additionally, MRIL had a turnover of Rs. 1,111.87 crores in the financial year 2020-21.

Ichamati Investments Ltd, a subsidiary of the Kolkata-based Khaitan family, is a promoter of  McLeod Russel India Ltd. According to BSE, Ichamati Investments was a 9.63% stakeholder of MRIL as of 30 June 2021.

Find Out More About the Proceedings

McLeod Russel India Ltd. started to face liquidity issues back in early 2018. As a result, its board decided to sell some of its tea estates for debt repayment.

Recently, MRIL faced insolvency proceedings since Techno Electric & Engineering Company, one of its financial creditors, moved to the bench of National Company Law Tribunal (NCLT) Delhi for the recovery of its due amount of Rs. 100 crores.

Earlier in June 2021, IndusInd Bank had acquired 70,67,500 equity shares of MRIL, representing 6.77% of the paid-up equity share capital of MRIL. To recover the dues, IndusInd Bank invoked the pledged shares of the borrower company.

On 28 September 2021, IndusInd Bank acquired another 50 lakh equity shares of McLeod Russel India Ltd. for the same reason as announced in the regulatory filing. This acquisition brought IndusInd’s stakes in MRIL to 4.79%.

The closing price of McLeod Russel India Ltd. shares on 28 September 2021 was Rs. 32.20. So, keeping that rate in mind while calculating, the invoked shares would have fetched IndusInd Bank an amount of Rs. 16.10 crores.

Frequently Asked Questions

1. What is the market capitalisation of IndusInd Bank?

As of writing, the market capitalisation of IndusInd Bank is Rs 85.78 thousand crores.

2. What is the P/E ratio of IndusInd Bank?

As of writing, the P/E ratio of IndusInd Bank is 24.39.

3. What is the dividend yield of IndusInd Bank?

As of writing, the dividend yield of IndusInd Bank is 0.45%.