Indusind Bank faced a setback at its Annual General Meeting (AGM) held on August 28, as shareholders rejected a proposal that would have allowed promoters to nominate an additional director to the bank's board. The resolution was voted down by a majority of 54% of shareholders, signaling a clear stance against the proposed change.

Background of the Proposal

The proposal stemmed from a previous amendment to the bank's Articles of Association, which aimed to enable promoters to collectively nominate up to two directors. This change, however, was subject to shareholder approval. The proposed additional director would have been non-executive and non-independent, potentially altering the board's composition and dynamics.

Shareholder Concerns and Promoter Response

The rejection of the proposal highlights significant shareholder concerns regarding board composition and corporate governance. In response to the voting outcome, IndusInd International Holdings (IIHL), a key promoter of the bank, acknowledged the situation, stating that there has been a misinterpretation. IIHL expressed willingness to address the concerns raised by shareholders, indicating a potential for future dialogue and clarification on the matter.

Pending RBI Approval

Adding another layer of complexity to the situation, IIHL's request to increase its stake in IndusInd Bank from the current 15% to 26% is currently pending approval from the Reserve Bank of India (RBI). This proposed increase in stake, if approved, could have implications for the bank's ownership structure and governance.

Market Reaction

The news of the shareholder rejection appeared to have a modest impact on IndusInd Bank's stock performance. Shares of IndusInd Bank closed 0.80% lower at ₹740.90 on the day of the announcement. It's worth noting that the bank's shares have experienced a decline of 5.50% over the past month, indicating broader market sentiment or other factors affecting its stock price.

This development underscores the importance of shareholder voting in corporate governance matters and highlights the delicate balance between promoter interests and overall shareholder sentiment in the banking sector.

Indusind Bank 's 31st Annual General Meeting (AGM) on August 29, 2025, saw a mix of approvals and rejections, highlighting the shareholders' active engagement in the bank's governance.

Rejection of Board Nominee Proposal

54.04% of shareholders voted against a proposal to amend the bank's articles of association, which would have allowed the induction of two nominee directors to the board. This decision came despite the proposal having received prior approval from the Reserve Bank of India (RBI) and the bank's board.

New CEO Appointment

Shareholders overwhelmingly approved the appointment of Rajiv Anand as the new Managing Director and CEO of IndusInd Bank. The resolution passed with 98.82% of votes in favor, demonstrating strong support for the new leadership.

Promoter's Stance

IndusInd International Holdings Ltd (IIHL), the promoter entity, expressed disappointment with the outcome of the board nominee proposal. IIHL cited misinterpretation by proxy advisors as a factor in the rejection. The promoter highlighted its long-standing support for the bank, including:

• A 30-year history of backing the bank
• Subscription to 1.57 crore warrants at Rs 1,709.00 per share in February 2021, when the market price was Rs 1,046.00
• A total investment of Rs 2,683.00 crore through the warrant subscription
• Reduction of its stake from over 90% in 1994 to around 15% currently

IIHL has sought RBI approval to increase its stake to 26%, underscoring its commitment to the bank's growth.

Other Key Resolutions

The AGM also saw the approval of several other important resolutions:

Conclusion

The AGM results reflect a dynamic interplay between shareholder interests and management proposals at IndusInd Bank. While shareholders showed strong support for the new CEO and various financial measures, the rejection of the board nominee proposal indicates their active role in shaping the bank's governance structure.

The bank's leadership will need to navigate these shareholder sentiments as it moves forward with its growth and governance strategies.