Mumbai: The promoter and managing director of Indiabulls Housing Finance Ltd bought shares worth Rs.100 crore to increase their stake in the Mumbai-based private housing finance company—four days after its purchase of a stake in a British bank led to a hammering of the stock.
In its filing to stock exchanges, Indiabulls Housing Finance said chairman Sameer Gehlaut and vice-chairman and managing director Gagan Banga have increased their holding in the company by buying shares from the secondary market.
Gehlaut increased his stake from 23.51% to 23.80% and Banga from 0.49% to 0.52%.
The purchase further instils the faith that the management and promoters have in the company, the spokesperson said.
Shares of Indiabulls Housing Finance lost 2.14% to close at Rs.630.05 per share on Monday on the BSE, while the benchmark index, Sensex, gained 0.58% to close at 25,760.10 points.
Last week, Indiabulls Housing Finance acquired a 40% stake in UK’s OakNorth Bank Ltd, a digitally focused bank that targets the small business segment, for $100 million and has plans to use the investment to build up credibility as a deposit-taking franchise.
On Friday, when the market reopened after a two-day holiday, the stock tumbled as much as 17% in intra-day trading. The stock touched a low of Rs.592.30, a level last seen on 29 June, and pared some of the losses to close at Rs.643.85 on the BSE, down 10.02%, on a day the benchmark BSE Sensex closed at 25,610, down 0.99%.
Indiabulls Housing Finance hopes the deal will strengthen its case for securing a deposit-taking licence from the Reserve Bank of India (RBI), Banga said on 13 November. The company has no interest in a full banking licence and is only looking to diversify its liability franchise, he said.
“The effect that we hope to achieve is that by becoming the largest shareholder in a deposit-taking franchise in the UK, which is a strongly regulated market, we would be able to go back to the RBI and build a case for a deposit-taking licence in the domestic market,” Banga said.
According to him, the company will not be making any further capital commitment to the UK market.
Indiabulls Housing will become the largest shareholder in OakNorth Bank with the $100 million deal.
