Indiabulls Housing sells stake in UK-based OakNorth Bank for Rs 630 cr

 The country’s third largest mortgage lender, Indiabulls Housing Finance (IHF), has sold a part of its stake in the UK-based OakNorth Bank to TEMF Limited, a fund managed by Toscafund Asset Management, for approximately Rs 630 crores. Earlier this month, the mortgage lender sold a part of its stake in the UK-based lender 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.

IHF has now raised Rs 1,832 crore as fresh equity through stake sale in OakNorth Bank and qualified institutional placement (QIP). The mortgage lender raised Rs 683 crore from the issue of QIP and Rs 1,149 crore from the stake sale.

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 3 billion pounds. It has lent over 4 billion pounds since its launch.

In a statement to the exchanges, the mortgage lender said it has issued bonds worth Rs 2,780 crores in the current fiscal till date and has raised Rs 1,832 crores in fresh equity in the same period, adding to the regulatory equity capital of the company. Further, the company has launched a buyback of all its bonds maturing in the next 12 months.

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.

Recently, the company saw 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.