Indiabulls Housing Finance is about to buy 40 per cent stake in OakNorth Bank for $ 100 million
Indiabulls Housing Finance
OakNorth, which is a London lender now aims to challenge the dominance of other large global finance companies such as; HSBC, Barclays, Lloyds and Royal Bank of Scotland in India. Now India is prime destination for investors and it is emerging in as the world’s largest financial centre. Indiabulls Housing Finance, one of the Indian corporate houses is ready to acquire a large stake in a London based foreign bank, OakNorth. According to sources, Indiabulls Housing Finance is buying 39.8 per cent stake in UK’s OakNorth Bank for $ 100 million.
Sameer Ghelot, Chairman of Indianbulls group is also planning to acquire 10 per cent stake in the same bank through his personal capital with same valuation. This deal is one of the largest deal among several other Indo-British deals and it is expected that deal will be signed on Thursday when PM Narendra Modi will meet the British PM David Cameron in London. The National Housing Bank (of India), the Reserve Bank of India and Prudential Regulation Authority of the Bank of England have approved this investment. First time in history these regulatory approval authorities are ready to approve such a big stake to any Indian corporate into a foreign bank, as per company statement. After this deal Indiabulls group will be the largest shareholder in the OakNorth Bank. However; still company has an option to increase its stake in the bank in near future, as per company sources.
About OakNorth Bank:
OakNorth Bank is London based largest non-bank lender active in SME segment with outstanding SME loan assets of over $2.3 billion and loan disbursals to these companies at over $5 billion, as per company sources. In UK, OakNorth Bank is focusing on the structurally under-served SME sector and now at this point of time Indiabulls with a decade-plus experience in lending at same sector in India is ready to take benefit from resources and market skills of OakNorth Bank as Indiabulls has an extensive credit processes based on cash flows. However; on the same time OakNorth Bank will also take benefit from Indiabulls’ experience as it is one of the largest lender in small business, especially with its LAP (Loan Against Property) products.
In 2013, Rishi Khosla a former adviser of India-born steel magnet Lakshmi Mittal was put the foundation of OakNorth Bank. During the phase of set up, OakNorth Bank had secured an investment and funding from a former member of Bank of England’s monetary policy committee. However; in present a former chairman of Financial Services Authority of the UK is on its board of directors. On the deal, Gehlot stated that with this investment, Indiabulls group total exposure in London will become shinier with excess of Rs 4,200 crores. Apart from this deal group’s real estate arm is engage in redeveloping the four projects in London, which is worth of total Rs 3,500 crore.
From the side of Indiabulls, this investment decision was led by a former deputy governor of RBI, MR. K C Chakrabarty as currently he is acting as an independent director on the Indiabulls board now.
