Indiabulls looking to offload minority stake

Indiabulls Housing Finance has hired investment bank Moelis to sell a significant minority stake to one or more financial investors. The non-banking finance company has opened a ‘data room’ this week to initiate the proposed deal.Some of the private equity houses and asset managers which may be sounded out by Moelis are TPG, Lonestar, Oaktree, Brookfield, besides Apollo Global which had done a due diligence of the company earlier.A new set of investors are being sounded out a point when the company is shedding some of its troubled wholesale loan book.Between 20% to 25% equity stake could be offered to the new investor(s). The new strategic partner, to be inducted through fresh issuance of equity shares, will in all likelihood have to make an open offer as the proposed transaction would result in a change of control.The transaction and the open offer may eventually pave the way for Sameer Gehlaut to step aside as the promoter of the company. Gehlaut, currently a non-executive director, has distanced himself from the company’s day to day operations for almost a year.“However, the promoter group led by Sameer Gehlaut is not looking to sell their stake directly. Promoter’s stake is currently at 21.7% as a result of induction of the private equity player in the company,” said one of the persons mentioned above. The process to reclassify a promoter begins after the promoter group’s stake falls below 10%. However, Sebi may soon consider raising the threshold to 15% — which could quicken Gehlaut’s exit as a promoter.All potential investors will await the final guidelines of Reserve Bank of India on NBFCs to figure out the possible return on equity from such an investment.The Indiabulls spokesperson did not respond to ET’s query.As the discussions are still at an early stage, pricing and exact structure of the deal are yet to be decided. The initial transaction is likely to be completed by June-July.Some of these funds may have taken a preliminary look at Indiabulls Housing Finance’s books and portfolio that the company has been working on de-stressing for the last 18 months. Indiabulls had struck structured deals with investors like Oaktree and SSG to sell some loans after part-investing in a vehicle which takes over the assets.Indiabulls Housing Finance’s loan book stood at ₹70,282 crore at the end of December quarter with housing loans contributing 65% and balance coming from non-housing loans including loan against property (LAP) and developer finance.The company’s net profit for the quarter rose 2% sequentially to Rs 329 crore with net interest income of ₹809 crore. Since April 2020, it has raised total funding of ₹28,119 crore, Indiabulls had stated in its quarterly earnings statement. 81317340

from Economic Times https://ift.tt/386WA8H