Indiabulls Housing Finance fell 11.12% to Rs 636 at 9:35 IST on BSE after the company said it acquired about 40% stake in UK-based OakNorth Bank for $100 million.
The announcement was made on Wednesday, 11 November 2015.
Meanwhile, the BSE Sensex was down 247.17 points, or 0.96%, to 25,619.78.
On BSE, so far 2.07 lakh shares were traded in the counter, compared with an average volume of 1.52 lakh shares in the past one quarter.
The stock hit a high of Rs 713 and a low of Rs 620.05 so far during the day. The stock hit a record high of Rs 820 on 10 August 2015. The stock hit a 52-week low of Rs 401.10 on 17 December 2014.
Also Read
The stock had outperformed the market over the past one month till 11 November 2015, sliding 3.53% compared with 4.48% decline in the Sensex. The scrip had, however, underperformed the market in past one quarter, falling 10.72% as against Sensex's 7.17% decline.
The large-cap company has an equity capital of Rs 84.12 crore. Face value per share is Rs 2.
Indiabulls Housing Finance said that it acquired 39.76% stake in UK-based OakNorth Bank for $100 million (Rs 660 crore), making it the lender's biggest shareholder and aiding its expansion into new business areas overseas.
Indiabulls Housing Finance said that OakNorth Bank has a successful deposit-taking franchise and this acquisition will give the company an opportunity to build credentials and track record on this crucial aspect of establishing a comprehensive liability profile for its core business. Pursuant to all applicable regulatory approvals from relevant regulators in India and the UK, viz, the Reserve Bank of India (RBI); the National Housing Bank (NHB); and the Prudential Regulation Authority (PRA) of the Bank of England, Indiabulls Housing Finance is investing $100 million for 39.76% stake in OakNorth Bank, a licensed UK commercial Bank. With 39.76% shareholding, Indiabulls will be the largest shareholder in the bank. Further, subject to regulatory approvals, Mr. Sameer Gehlaut, Chairman of Indiabulls, will be investing in his personal capacity up to 10% stake in OakNorth Bank at the same valuation.
Indiabulls Housing Finance said it believes that the largest shareholding in OakNorth Bank and the related approvals, will not only improve the perception of the company but will also go a long way in providing enhanced comfort to all stakeholders of the company, including rating agencies. The acquisition is a strategic investment and going forward the company maintains its guidance of 20%-25% annual growth across all financial parameters, as it has registered over the last 6 years. This investment will have no impact on the company's dividend policy guidance of paying 50% of profits as dividends, the Indian company said.
Investment in OakNorth Bank will benefit the company with a global platform for building its track record of a deposit franchise in a highly regulated market. OakNorth Bank will benefit from the expertise of the company in lending to the small businesses - its highly successful Loan against property products
The company is the largest non-bank lender to the Small and Medium-sized Enterprises (SME) segment with SME loan disbursals of over $5 billion and outstanding SME loan assets of over $2.3 billion. OakNorth Bank is focussed on structurally underserved SME sector in the UK and will benefit from the company's decade-plus SME lending experience and its extensive credit processes based on cash flow appraisals for each SME sector, the company added.
On a consolidated basis, net profit of Indiabulls Housing Finance rose 23.94% to Rs 555.54 crore on 32.7% rise in total income to Rs 2245.72 crore in Q2 September 2015 over Q2 September 2014.
Indiabulls Housing Finance is a housing finance company. The company also provides other loans, such as loan against residential properties for home improvement and to small businesses, commercial vehicle loans, and corporate loans for housing projects.
Powered by Capital Market - Live News
