Indian Bank Seeks Growth in FY27 Through Wealth Management, QIP Fundraising, and Corporate Loan Expansion

Indian Bank Charts Path Towards Wealth Management, Eyes Fundraising in Q3 FY27

Indian Bank, one of the country's leading lenders, has announced its plans to diversify into wealth management, aiming to tap into the affluent market and reduce its reliance on traditional sources of income. The bank's Chief Executive Officer, Binod Kumar, outlined the lender's strategy at a recent roundtable conference with reporters.

According to Kumar, the bank will establish a wealth unit and explore potential fundraising through a qualified institutional placement (QIP) in the third quarter of the current fiscal year (Q3 FY27). The QIP is expected to raise between Rs 2,000 crore and Rs 2,500 crore, which will be used to cover provisions for the new expected credit loss (ECL) norms introduced by the Reserve Bank of India (RBI).

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The bank expects to incur provisions of between Rs 4,000 crore and Rs 6,000 crore for the transition to the ECL norms. Kumar stated that the government's holding in the bank will reduce to around 70 percent from the current 73.84 percent, assuming the entire amount is raised.

Indian Bank is also exploring opportunities in wealth management, partnering with asset management companies (AMCs) and adopting a distribution-based model. The lender aims to tap into the growing number of high-net-worth individuals and capitalize on the lucrative wealth management segment.

In addition to wealth management, the bank is focusing on corporate lending and acquisition financing. Kumar reported that corporate loan growth is expected to be in double digits for the current fiscal year (FY27), following a 9 percent growth in FY26. The lender is seeing visible demand in new-age sectors such as green financing, transmission lines, and data centers.

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The bank has underwritten loans for two projects in the green financing and data center sectors in March. Kumar stated that the lender is focusing on the "sweet spot" in the Rs 50 crore - Rs 500 crore segment, where the yield is better due to the lack of bargaining power from borrowers.

Regarding acquisition financing, Kumar stated that the lender will be open to financing opportunities following the RBI's enabling framework. However, challenges remain in finalizing valuations, particularly for larger deals.

Indian Bank is also actively reaching out to eligible borrowers under the Emergency Credit Line Guarantee Scheme (ECLGS) framework, rather than waiting for customer requests. The lender's ECLGS-linked book is estimated at roughly Rs 12,000 crore - Rs 15,000 crore.