Indiabulls raises Rs 1,200 crore via QIP, unit stake sale

Shares of Indiabulls Housing Finance (Indiabulls) rally nearly 2% to Rs 189.45 apiece on NSE after it raised about Rs 1,205 crore over the last few days through its qualified institutional placement (QIP) and partial stake sale in UK-based OakNorth Bank.
The private sector mortgage lender has raised Rs 682.87 crore through the QIP and Rs 522 crore from the partial stake sale.
The Securities Issuance Committee at its meeting held on September 14, 2020, approved the closure of the issue period of the issue (QIP) pursuant to the receipt of application forms for an aggregate of 3,47,74,811 fully paid-up equity shares of the company and the funds in the escrow account from eligible qualified institutional buyers in accordance with the terms of the issue, which opened on September 9, 2020.
Indiabulls Housing Finance QIP issue was priced at Rs 196.37 per equity share, which was at a discount of 5% from the floor price of Rs 206.70 per share.
Further, the company has sold a portion of its stake in OakNorth Holding (the wholly owning parent company of OakNorth Bank), to an existing sovereign shareholder of the bank for Rs 82 crore.
The company had sold partial stake in OakNorth for Rs 440 crore to private equity investor HighSage Ventures LLC on September 10.
The company sold partial stake in OakNorth for an aggregate amount of Rs 522 crore, to private equity investors, during the last one week. The sale proceeds will be accretive to the regulatory net worth and the CRAR (capital to risk weighted assets ratio) of the company.
OakNorth Bank was launched in September 2015 and Indiabulls had invested Rs 663 crore in November 2015 for a 40% stake in the bank. This divestment shall result in boosting capital adequacy ratio and shall free up capital to grow the company’s loan book.
Within two years of this, in November 2017, Indiabulls Housing recouped its investment by selling about 10% stake to the Government of Singapore’s investment arm GIC for Rs 770 crore.
The company intends to use proceeds from the share sale to augment its capital adequacy ratio and maintain liquidity to meet funding requirements of its business activities.
Founded in 2015, OakNorth Bank has grown its deposits to just under £3 billion and its loan book to over £4 billion.
Indiabulls Housing at extraordinary general meeting on July 29, had sought shareholders’ approval to raise up to USD 300 million by issuing securities through QIP or foreign currency convertible bonds.

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