Indiabulls Housing Seeks Rs 1,000 Crore From QIP, Stake Sale In OakNorth Bank

Indiabulls Housing Finance Ltd. aims to raise up to Rs 1,000 crore via a QIP launched Wednesday and stake sale in U.K.-based OakNorth Bank Ltd., sources said.

"Rs 500 crore (about $68.13 million) each is targeted to be raised through the QIP and divestment in OakNorth Bank in next two-three days," a source said. The non-banking financial company intends to raise more capital during September, another person aware of the fundraising plans said.

QIP

At its meeting held on Wednesday, the Securities Issuance Committee of the board approved a qualified institutional placement of shares at a floor price of Rs 206.70 apiece, according to an exchange filing. "The company may offer a discount of not more than 5% on the floor price so calculated for the issue (QIP)," the filing read.

The committee will meet on Sept. 14 to approve the issue price, including a discount, if any, for the equity shares to be allotted to qualified institutional buyers.

At an extraordinary general meeting held July 29, the board had sought shareholders' approval for raising up to $300 million by issuing securities via QIP or foreign currency convertible bonds during the course of the next one year.

The fundraising is aimed at shoring up capital and maintaining sufficient liquidity for meeting funding requirements for its business activities, the company had said after the EGM. The company had also said that it was optimistic about growth, after having successfully demonstrated liquidity of loan assets over the past 20 months.

Stake Sale

In a separate filing, Indiabulls Housing Finance said it is exploring various options for partial divestment of its shareholding in OakNorth Bank in one or more tranches. “The divestment shall result in boosting CRAR and shall free up capital to grow the loan book of the company,” the filing read.

Indiabulls Housing Finance had in November 2015 invested Rs 663 crore for a 40% stake in OakNorth Bank. Within two years, the company recouped the investment by selling about 10% stake to GIC Pte Ltd. for Rs 770 crore.

Founded in 2015 to address the mid-market funding gap in the United Kingdom, a highly competitive and regulated market, OakNorth Bank became profitable in 11 months. Within four years of operations, it has grown its deposits to a little under £3 billion and its loan book to little over £4 billion.

On Wednesday, Indiabulls Housing’s shares fell 0.54% to Rs 201.15 apiece on the BSE while the benchmark Sensex ended the day 0.45% lower at 38,193.92 points.