The Indiabulls Group
- Indiabulls Group is an Indian conglomerate founded by Sameer Gehlaut in 1999. It went public in 2005, and operates in sectors like housing finance, real estate and wealth management.
- As of 2015, Indiabulls Group had 7000 employees, and a net worth of over ₹19,000 crore.
- Headquartered in Gurgaon, Indiabulls is one of the top dividend paying groups amongst the Indian listed promoter owned group/companies.
Indiabulls Housing Finance-growing at a fast pace
Indiabulls Housing Finance has seen its assets under management (AUM) grow by 38% over the past five years, making it India's third largest housing finance company.
Indiabulls stock plummets on UK bank deal
- After Indiabulls announced its planned acquisition of 39.76% stake in OakNorth, its shares crashed.
- Its stock dived 17.46% intra-day to ₹590.60 on the Bombay Stock Exchange.
- At the National Stock Exchange, Indiabulls shares fell 18.52% intra-day to ₹584.
- At the end of the day, Indiabulls' shares closed, down by 10.02% on the BSE at ₹643.85, and down by 10.22% on the NSE at ₹643.50.
Indiabulls buys 39.76% stake in OakNorth Bank
- Mumbai-based Indiabulls Group has bought a 39.76% stake in UK-based OakNorth Bank, a lender to small businesses and enterprises.
- The deal was valued at £66 million and boosted OakNorth's capital base to over £85 million.
- "This is a massive vote of confidence in OakNorth, and this major investment will enable us to accelerate and expand our ambitious growth plans," said OakNorth co-founder Rishi Khosla.
The timing of the acquisition
Indiabulls' acquisition of 39.76% stake in OakNorth Bank comes just after Prime Minister Narendra Modi's visit to the United Kingdom which is supposed to bring $14 billion worth of business deals.
Analysts' opinions about the deal
- OakNorth obtained its licence in March 2015 and has a small loan book of £25-30 million and a small deposit base of £10-15 million.
- In that light, analysts believe Indiabulls' £66 million acquisition is extravagant.
- Neither do they believe that the acquisition will make it easier for Indiabulls Housing Finance to get the RBI's approval to become a deposit-taking non-banking financial company (NBFC).