Indiabulls Housing Finance share price tanked as much as 17.5 per cent on Friday after the company on Thursday informed BSE that it will acquire a 39.76 per cent stake in the UK’s OakNorth Bank (Photo: PTI)
Indiabulls Housing Finance share price tanked as much as 17.5 per cent on Friday after the company on Thursday informed BSE that it will acquire a 39.76 per cent stake in the UK’s OakNorth Bank for $100 million (about Rs 661 crore), which raised doubts over allocation of capital.
At 12.04 pm, the share price of Indiabulls Housing Finance was trading 12.93 per cent down at Rs 624.40. The scrip opened at Rs 713 and had touched a high and low of Rs 713 and Rs 590.60, respectively, in trade so far. Sensex was down 1.02 per cent at 25,603.30.
“The company has not shared the book size, quality of assets, the strategic reason nor the synergy for this partnership,” said an analyst at a domestic brokerage Indiabulls chairman Sameer Gehlaut may acquire additional 10 per cent in OakNorth at the same valuation after regulatory nod exchange filing.
OakNorth Bank is a start-up UK bank. It aims to attract low-cost deposits via the online channel and extend loans to SME/LAP customers.
Nomura in a research report said, “We believe $100mn for this optionality is large, especially for a start-up bank. Also, we would have preferred such an acquisition to have occurred before the capital raising rather than after.”
Nomura has a ‘Buy’ rating on Indiabulls Housing Finance stocks with a target price of Rs 800.
(With inputs from Reuters)
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