Shares of an NBFC registered with the RBI as a systemically important non-deposit-taking company surged 12.7 percent on BSE to hit a new 52-week high at Rs. 339.7 on Friday, after the company’s Board approved the sale of its subsidiary to EQT, a global private equity investor, for Rs. 1,750 crores.
With a market capitalisation of Rs. 3,974.5 crores, at 12:12 p.m., the shares of Indostar Capital Finance Limited were trading in the green at Rs. 320.5, up by nearly 6.4 percent, as against its previous closing price of Rs. 301.35.
What’s the News:
IndoStar Capital Finance announced that its Board has approved the sale of IndoStar Home Finance to WITKOPEEND B.V., an affiliate of BPEA EQT Mid-Market Growth Partnership (EQT), a global private equity investor, for Rs. 1,750 crores on a fully diluted basis.
Indostar Home Finance Private Limited (IHFPL) is a wholly-owned subsidiary of IndoStar Capital Finance Limited (ICFL).
As stated in the latest regulatory filings with the stock exchanges, the transaction is subject to customary conditions, including the receipt of RBI approval, lender consent, and shareholder approval.
Further, EQT plans to invest Rs. 500 crore into IHFPL upon or shortly after the closing of this transaction, with the board of IHFPL having granted in-principle approval for this infusion.
This transaction will provide ICFL with capital for accelerated growth and enhance value creation in its primary verticals of Vehicle Finance and Small Business Loans.
Daiwa Corporate Advisory India and Ambit Private Limited served as exclusive financial advisors to ICFL and IHFPL for the transaction. Cyril Amarchand Mangaldas acted as legal counsel, while Ernst & Young LLP conducted vendor financial and tax due diligence. Further, Samvad Partners was also engaged by IHFPL.
About the Subsidiary:
IndoStar Home Finance Private Limited (IHFPL), registered with the National Housing Bank, as a Housing Finance Company and a wholly owned subsidiary of ICFL, is engaged in providing affordable home finance across India.
As of 30th June, IHFPL has expanded to 121 branches across 8 states with an AUM of Rs. 2,395 crores, with an employee base of 1,029 and an average ticket size of Rs. 9 lakhs.
About EQT:
EQT is a purpose-driven global investment organization managing EUR 246 billion in total assets under management (AUM), including EUR 133 billion in fee-generating assets, across two business segments: Private Capital and Real Assets.
EQT owns a diverse portfolio of companies and assets in Europe, Asia-Pacific, and the Americas, focusing on supporting them in achieving sustainable growth, operational excellence, and market leadership.
Financials:
The company reported a significant growth in its revenue from operations, showing a year-on-year rise of around 30.4 percent, rising from Rs. 299 crores in Q1 FY24 to Rs. 390 crores in Q1 FY25.
Net interest income (NII) also rose by 29 percent, climbing from Rs. 144.7 crores in Q1 FY24 to Rs. 186.5 crores in Q1 FY25.
As of Q1 FY25, the company’s assets under management (AUM) grew by 18.6 percent to Rs. 9,565 crores, compared to Rs. 8,062 crores in Q1 FY24, while disbursements surged by 45.8 percent to Rs. 1,627 crores, up from Rs. 1,116 crores in the previous year.
However, net profit decreased from Rs. 39 crores to Rs. 25 crores during the same period, reflecting a decline of nearly 36 percent.
Stock Performance
The stock has delivered positive returns of nearly 85.2 percent of returns in one year, and around 58.6 percent of positive returns in the last six months. So far in 2024, the shares of IndoStar Capital Finance have given positive returns of about 85.8 percent.
About the Company:
Incorporated in 2009, IndoStar Capital Finance Limited (ICFL) is registered with the Reserve Bank of India (RBI) as a Systemically Important Non-Deposit taking Non-Banking Financial Company (NBFC-ND-SI).
ICFL is primarily engaged in the lending business, and has been classified as Middle Layer as per Master Direction Reserve Bank of India.
With Brookfield & Everstone as co-promoters, IndoStar is engaged in providing used and new commercial vehicle financing and affordable Home Finance through its wholly-owned subsidiary, IndoStar Home Finance Private Limited.
Written by Shivani Singh
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