Indiabulls Housing to buy 39.76% stake in UK bank for $100 million

Indiabulls Housing Finance on Wednesday said it is investing $100 million for a 39.76 per cent stake in OakNorth Bank, a full service universal bank in the UK. This will make the Indian company the largest shareholder in the bank.

In addition, Sameer Gehlaut, Chairman of Indiabulls, will pick up a 10 per cent stake in his personal capacity in the UK bank at the same valuation.

“OakNorth Bank has a successful deposit-taking franchise and this acquisition will give the company an opportunity to build credentials and track record on this crucial aspect of establishing a comprehensive liability profile for its core business,” Indiabulls said in a statement.

Approved by panel The investment has been identified and approved by the Strategic Investment Committee for Liability Franchise Development, headed by former Deputy Governor of RBI and now an independent director on the Board of Indiabulls KC Chakrabarty, for the purpose of creating a practical roadmap to a deposit-taking franchise.

With this investment, the total investments of Indiabulls Group in the economy of London would be in excess of ₹4,200 crore, the company said. Indiabulls said the deal will not only improve the perception of the company but also go a long way in providing comfort to all stakeholders of the company, including rating agencies.

Going forward, the company maintains its guidance of 20–25 per cent annual growth across all financial parameters. This investment will have no impact on its dividend policy guidance of paying 50 per cent of profits as dividends.

OakNorth Bank will benefit from the expertise of Indiabulls in lending to small businesses.