Indiabulls Housing Finance is reportedly planning to divest entire or part of its 18.7% stake in UK-based mortgage lender OakNorth to an anonymous private equity fund.
If the proposed transaction materialises, it will enable the Delhi-headquartered mortgage lender to collect more than six times gain on investment in less than three years, reported The Economic Times.
The current value of Indiabulls’ stake is approximately INR45bn ($611.87m).
Besides Indiabulls, OakNorth has investors such as Singapore-based Government Investment Corporation and Clermont Group.
A source familiar with the development told the publication that: “Indiabulls is looking to sell stake in the UK-based mortgage lender OakNorth to a large private equity fund.
“The deal is likely to close within a month. The enterprise value of OakNorth is over $2.5bn to $2.9bn as per this transaction. Indiabulls has met with potential investors including Softbank’s Vision Fund. SoftBank is looking to subscribe to new shares as well as buy stake from Indiabulls Housing Finance.”
In November last year, Singaporean sovereign investor GIC purchased a 10% stake OakNorth from Indiabulls Housing for around $120m.
Indiabulls acquired a 40 % stake in OakNorth Bank for $100m in Novembers 2015.
OakNorth was launched in 2015 after the financial crisis in 2008 when the Bank of England reduced the capital requirements to establish new banks.