The promoters of IndusInd Bank -- the Hindujas -- will be increasing their stake in the bank through the foreign direct investment route.

The Budget 2003-04 had proposed the hiking of foreign shareholding in banks to 74 per cent.

"We are waiting for detailed guidelines from the government as well as the Reserve Bank of India, which will be available after the finance Bill is passed by Parliament," said the executive vice-president of the bank, J K Basu.

At present, the total foreign shareholding in the bank is close to 36.53 per cent, leaving room to hike promoters' stake by another 37.47 per cent in the bank.

The promoters of the bank at present hold around a 49.86 per cent stake in the bank, which is divided into a 25 per cent foreign holding and a 24.86 per cent domestic holding through IndusInd Enterprises & Finance Ltd.

The foreign holding, all belongs to the Hindujas through overseas group companies, is divided among IndusInd International Holdings Ltd at 10.94 per cent, IndusInd Bank Ltd Mauritius at 9.69 per cent, and De Five Mauritius Holdings Ltd at 4.38 per cent.

"This is a good opportunity for the promoters of the bank, and the Hindujas will possibly increase their holding in the bank through these companies," he said.

The Hindujas have also initiated the process of merging IEFL with the bank at a swap ratio of 1:1 which was revised by RBI at 5:6. "We have asked for the RBI's reconsideration which will be settled soon," he said.

This will also bring down promoters' holding in the bank by around five per cent.

"Once the 74 per cent FDI route is cleared by the government, the promoters will enhance their stake in the bank. The exact amount, however, will be decided once the guidelines are available," Basu said.

The bank is also looking forward to acquire the portfolio from other non-banking finance companies and it has acquired Rs 300 crore (Rs 3 billion) of retail assets last year. "We will also be acquiring the portfolio of NBFCs and banks," Basu said.

On the business front, IndusInd bank is in the process of opening representative offices in London and Dubai.

"We have received the green signal from the authorities at UK as well as RBI, and expect to commence operation within the next two months. At Dubai we will start business after four months," Basu said.

"The plan is to initiate business as a representative office and later transform them into branches," he added.

The bank is also considering representative offices at other locations with high non-resident Indian concentration. IndusInd will double its number of branches from 53 to 106 this year.