Indiabulls housing fin sells some more stake in OakNorth Bank for Rs 441 cr

Mortgage lender Indiabulls Housing Finance has sold some more stake in the UK-based OakNorth Bank to US-based Riva Capital Partners for approximately Rs 441 crore. Last month, it had sold portions its stake in the UK based bank to TEMF Limited, a fund managed by Toscafund Asset Management, for approximately Rs 630 crore and to HighSage Ventures, a Boston-based investment firm, for Rs 440 crore. The proceeds will be used to bolster the capital adequacy ratio of the lender.

With the latest stake sale, the lender has raised Rs 2,273 crore as fresh equity in the month of September and October 2020, of which Rs 683 crore is through qualified institutional placement and Rs 1,590 crore through sale of stake in OakNorth, adding to the regulatory equity capital of the Company.

The mortgage lender had invested Rs 663 crore for a 40 per cent stake in OakNorth Bank in November 2015. A couple of years later, in November 2017, it sold around 10 per cent of its stake in the bank for Rs 770 crore to the government of Singapore-owned investment arm GIC for Rs 770 crore. The bank became profitable in just 11 months after its inception, and within four years of operations, its deposits have grown under to three billion pounds. It has lent over four billion pounds since its launch.

A high capital adequacy ratio will provide comfort to an investor in uncertain times, as real slippages from the moratorium book will be key for all financial companies.