Indiabulls Housing Finance, the country’s third-largest mortgage lender, has sold a part of its stake in the UK-based OakNorth Bank 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.
In a statement to the exchanges, Indiabulls Housing Finance said: “The company plans to conclude few other transactions on the partial stake sale in OakNorth Bank over the next few days. The divestments in OakNorth Bank will result in boosting CRAR and shall free up capital to grow the loan book of the company.”
It 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 of its inception, and within four years of operations its deposits have grown under £3 billion and has lent over £4 billion since its launch.
Prior to the stake sale in OakNorth Bank, Indiabulls Housing Finance, on Wednesday, launched a qualified institutional placement (QIP), aiming to raise funds from institutional investors, with a floor price of Rs 206.70 per equity share. The amount the company is looking to raise has not been disclosed by the mortgage lender. However, various reports have pegged the amount to be over Rs 700 crore.
The proceeds from the QIP will be used to boost the capital adequacy ratio and maintain liquidity to meet funding requirements of its business activities.
“Indiabulls Housing has planned to sell the remaining stake in the near future. Indiabulls Housings has raised funds through QIP and recent stake sale and the possibility of remaining stake sale will help them to build capital adequacy ratio. A high capital adequacy ratio will provide comfort to an investor in an uncertain time, as real slippages from moratorium book will be key for all financial companies," said Jaikishan Parmar, senior equity research analyst, Angel Broking.
Recently, the company has seen some changes in the top management with Sameer Gehlaut stepping down as the executive chairman of the company and independent director S S Mundra being elevated to the post of non-executive chairman. Gehlaut on the other hand will continue as a non-executive, non-independent director of Indiabulls Housing Finance and will head Indiabulls Ventures.
Shares of the company closed at Rs 194.05 apiece on the BSE, down 3.53 per cent from the previous close.