Dewan Housing Finance is likely to bag IDBI Home Finance, the wholly-owned housing finance subsidiary of state-run IDBI Bank.

The deal size is estimated at over Rs 300 crore, sources close to the development said.

The others in the fray included Religare Enterprises and Tata Capital, among others. “The deal is all but done and you should expect an announcement over the next few days,” said a source.

An announcement is likely to be made after the proposals are cleared by the IDBI Bank board, which is due to meet on January 22, another source said.

On January 9, Religare Enterprises had informed the stock exchanges that its board has approved the company’s participation in the bid for IDBI Home Finance. On the same day, Dewan Housing Finance had said that its board has approved the potential acquisition of an unlisted housing finance company. The company’s Vice-chairman and Managing Director Kapil Wadhawan was authorised “to take appropriate action as per the direction of the board”.

While Wadhawan refused to comment on the issue saying he was very busy, IDBI Bank executives did not take calls despite several attempts.

Sources in the government, however, said that they are not certain if selling the housing finance arm, instead of merging it with itself, was the best option. “It is a board managed company so we only have a limited say. In the past most banks have merged their housing finance subsidiaries if they started the business through the bank,” said a source.

IDBI Home Finance had a loan portfolio of Rs 2,700 crore at the end of March 2008, while Dewan Housing Finance’s loan book was estimated at around Rs 5,000 crore at the end of September.

IDBI Bank took over the erstwhile Tata Home Finance in September 2003 and renamed it IDBI Home Finance with a view to operate a separate unit for its home loans business. The company currently employs over 150 people across 18 centres and company reported a net profit of Rs 30 crore during 2007-08.

Dewan Housing has across 72 branches and had reported a 36.57 per cent increase in net profit to Rs 22.07 crore for quarter-ended September 30, 2008. For the year-ended March 2008, Dewan Housing’s net profit was estimated at Rs 86.65 crore.

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