Indiabulls Housing Finance Ltd has raised ₹440 crore by selling part of its stake UK based OakNorth Bank Ltd to Riva Capital Partners V, L.P. USA for ₹441 crore.
The sale proceeds will be accretive to the regulatory net worth and the CRAR of the Company, the housing financier said in a stock exchange notification on Friday.
This is the fourth time that Indiabulls Housing has offloaded OakNorth shares within a month. It divested stake of about ₹440 crore in early September, sold shares worth ₹82 crore in mid-September and then divested shares worth ₹630 crore at the end of the month.
Last month IBHFL had sold a portion of its stake in OakNorth Holding to a Boston based investment firm HighSage Ventures LLC for ₹440 crore.
“With the latest stake sale, the Company has raised a total of ₹ 2,273 crores as fresh equity in the month of September and October 2020 ( ₹ 683 crores through QIP and ₹ 1590 crores through sale of stake in OakNorth) adding to the regulatory equity capital of the Company,” said the notification.
OakNorth Bank was launched in September 2015 and Indiabulls had invested ₹ 663 crore in November 2015 for a 40% stake in the bank. 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 ₹770 crore. OakNorth contributed 1.54% or ₹ 33.88 crores to the consolidated net profit of IBHFL.
Indiabulls Housing’s business has been under pressure as is evident from ratings downgrades. In March, Moody’s Investors Service downgraded the home financier from B2 to B3, with a negative outlook, citing a challenging fund-raising environment. Rating agency ICRA had also downgraded the long-term rating of the company from stable to negative. The rating action was driven by Indiabulls Housing’s investment in Yes Bank’s additional tier I bonds and the continuing challenge of resource mobilization.
