India: Indiabulls Housing Finance to pick 40% in UK’s OakNorth Bank for $100m

Visual from OakNorth Bank website

Indiabulls Housing Finance (IHF) is acquiring nearly 40% stake in UK-based OakNorth Bank, a full-service lender, for about $100 million, in a bid to become the largest shareholder in the bank, according to a statement.

The deal will also see Indiabulls promoter and chairman Sameer Gehlaut pick a 10 per cent stake in the UK bank at the same valuation, subject to regulatory approvals.

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.

“With this, total investments of the Group in the vibrant economy of London would be in excess of Rs 4,200 crore,” Gehlaut said.

OakNorth Bank is focused on the structurally underserved small and medium enterprises sector (SME) in the UK, loan disbursals to the segment being the equivalent of $5 billion.

The regulatory approvals for this investment were 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.

The deal will improve the perception of the company and also go a long way in providing comfort to all stakeholders of the company, including rating agencies, Indiabulls said.

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

Also Read: RBS to exit India private banking business in management buyout

PNB Housing Finance mandates five investment banks for proposed $385m IPO

 

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.