Indiabulls acquires 40% of UK'a OakNorth Bank

Sameer Gehlaut-led Indiabulls Housing Finance Ltd. (IHFL) has acquired a 40-per cent stake in OakNorth Bank of the UK for $100 million, making it the largest shareholder of a full service universal bank.

Gehlaut has the option to buy another 10 per cent at the same valuation in his personal capacity as chairman.

This marks IHFL's foray into a deposit-taking franchise in the UK.

The investment has been identified and approved by the Strategic Investment Committee for Liability Franchise Develop- ment, headed by K C Chakrabarty, an independent director on the board and former deputy governor of the Reserve Bank of India, specially constituted by the Board for the purpose of creating a practical roadmap to a deposit-taking franchise,'' the company said in a statement.

''With this investment, total investments of Indiabulls Group in the vibrant economy of London would be in excess of R.4,200 crore,'' said Gehlaut.

OakNorth Bank has a successful deposit-taking franchise and this acquisition will give the company an opportunity to build credentials and a track record on this crucial aspect of establishing a comprehensive liability profile for its core business.

The regulatory approvals, which were received after rigorous due diligence, is the first ever to be given to an Indian corporate to acquire a large stake in a foreign bank, according to the company.

The company is the largest non-bank lender to the small and medium-sized enterprises (SMEs) segment with SME loan disbursal of over $5 billion and outstanding SME loan assets of over $2.3 billion.

OakNorth Bank is focussed on structurally undeserved SME sector in the UK.

Shares of IHFL rose 3.5 per cent to Rs60.80 valuing the company at Rs2,800 crore on Wednesday.