Sovereign Global to acquire 4.5 per cent in Indiabulls for Rs302 crore

Mumbai: Dubai-based fund Sovereign Global Investment Ltd will buy a 4.5-per cent stake in Indiabulls Financial Services Ltd. Sovereign will pay Rs302 crore ($66 million) through its subsidiary Crown Capital Ltd., Indiabulls said in a statement.

Indiabulls said its board had already approved preferential sale of 7.25 million shares at Rs417 each — a premium of 1.4 per cent to its closing share price on September 29. The company's consolidated net worth will exceed Rs3,000 crore with the share allotment.

New Delhi-based Indiabulls saw its share price more than double in one year.

Sovereign's investment in Indiabulls would be subject to a one-year lock-in under preferential allotment rules.

Sovereign also owns about $1.2 billion shares in ICICI Bank Ltd., India's largest private commercial bank, Housing Development Finance Corporation and UTI Bank Ltd.

With India's stock market gaining over 30 per cent so far in 2006 and the economy growing at an annual nine per cent foreign funds are pouring into the economy. Overseas investments into Indian stocks rose to around $11 billion in 2005, reports said.