Mumbai: IndusInd Bank will raise Rs 3,288 crore by selling shares through a preferential issue at a price of Rs 524 per share, to a set of institutional investors as it shores up its capital buffer amid Covid 19 linked uncertainties. The Hinduja Group, promoters of the bank will also subscribe to the issue to maintain their 15% stake.US-based hedge fund Route One which last week received RBI approval to raise its stake in the bank to 10% will subscribe to a chunk of the issue investing Rs 935 crore, followed by Rs 850 crore from ICICI Prudential Life Insurance.Promoter group companies Hinduja Capital Ltd and IndusInd International will together invest Rs 792 crore in the bank to maintian their 15% holding in the bank."This capital raise from long term, foreign as well as domestic investors, is strategic for us as this helps us bolster the bank’s balance sheet and position the bank well as the economy gradually navigates out of the Covid-19 pandemic. The capital raise also reflects the continued support and confidence that our promoters have in the bank," CEO Sumant Kathpalia said.In a confernce call with reporters Kathpalia insisted that the bank has sufficient liquidity with a buffer of Rs 30,000 crore and the capital will be useful when the economy picks up in the later half of the year.The issue price of Rs 524 per share was at a slight discount to the Rs 527 per share closing price of the bank on the BSE on Tuesday. Shares of the bank closed 4% higher even as the Sensex gained 1.47%.Other investors in the preference issue are Tata Investment Corp, the investment arm of the Tata Group and international insurance company AIA Co both of whom will invest Rs 300 crore and Rs 410 crore respectively.The preferential issue of shares is subject to shareholder approval at the extraordinary general meeting (EGM) called by the bank on 25 August.The capital adequacy of the bank will imrpove to 16.5% after the issue from 15.3%, the bank said."The bank will use this capital to continue to invest in liabilities and asset franchise, technology and infrastructure platforms, to expand reach, product offerings and to improve customer experience whilst ensuring sustainable financial parameters," IndusInd said.The capital infusion comes at a crucial time for the bank as it lost deposits in the last two quarters. However, it has managed to recover some of them as total deposits as of June 30, increased to Rs 2.11 lakh crore as against Rs 2 lakh crore, a year ago. Kathpalia said the bank will be cautious on loan growth till there uncertainty on Covid 19 reduces and the capital will be useful to accelerate growth when things are clearer.