Indiabulls Housing sells partial stake in OakNorth Bank for Rs 440 crore

NEW DELHI: Indiabulls Housing Finance on Thursday said it has sold a part of its stake in the UK-based OakNorth Holding Ltd, the parent company of OakNorth Bank Ltd, to HighSage Ventures LLC for Rs 440 crore. The sale proceeds will be accretive to the regulatory net worth and the CRAR (capital to risk weighted assets ratio) of the company, Indiabulls Housing Finance said in a regulatory filing.

On Wednesday, the company had informed about partial stake sale in OakNorth Bank in one or more tranches to boost its capital.

HighSage Ventures LLC is a Boston-based investment firm with an investor network spanning the venture capital, private equity and public equity communities.

“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,” said the non-banking finance company.

OakNorth Bank was launched in September 2015 and the company had invested Rs 663 crore in November 2015 for a 40 per cent stake in the bank.

With first major investment from Indiabulls Housing in 2015, the bank started addressing the mid-market funding gap in the UK, a business similar to loans against property business that Indiabulls Housing has done very successfully, it said.

Within two years of this, in November 2017, the company recouped its investment by selling about 10 per cent stake to the Government of Singapore’s investment arm GIC for Rs 770 crore.

In the highly competitive and regulated market of UK, OakNorth Bank became profitable in just 11 months, and within four years of operations has grown its deposits to just under 3 billion pounds and has lent over 4 billion pounds since its launch, it added.

Indiabulls Housing also launched its QIP on Wednesday and hopes to garner about Rs 500 crore from the issue, for which it has set the floor price at Rs 206.70 per equity share.

In total, the company is expecting to raise about Rs 1,000 crore from this QIP and partial stake divestment in OakNorth Bank.

Shares of the company closed at Rs 194.05 apiece on the BSE, down 3.53 per cent from the previous close.