Indiabulls Housing Prepares For a Makeover

Hours after selling more than half his stake to various funds, Indiabulls Housing Finance Ltd.'s founder Sameer Gehlaut said he will resign from the company's board by March 31 next year. “I am very grateful to all the stakeholders of Indiabulls Housing for this wonderful journey that started 21 years ago in a small 300 sqft office,” he said. Indiabulls Housing Finance is looking for a new strategic investor to anchor the company after founder and promoter Sameer Gehlaut reduced his stake below 10% last week even as the company plans to restructure its business by launching two credit funds which will undertake risky developer loans, derisking the company from the volatilities of wholesale lending. Chief executive Gagan Banga said the company will get an enabling resolution to give a board seat to any significant financial shareholder in the company, which could in the next few months translate into a strategic stake. Another attempt at getting a banking licence is also an option as the company will now be controlled by a diversified set of investors with no links to any group, he said. Last week, Gehlaut reduced his stake to 9.8% from 21.69% through a block deal, which was subscribed among others by private equity giant Blackstone Inc, sovereign wealth fund Abu Dhabi Investment Authority (ADIA), Hong Kong and Shanghai Banking Corp (HSBC) and local mutual funds Invesco and Quant Capital. Blackstone owns 3% in IHF while ADIA has 2% after the share purchase. Banga said Gehlaut's reduction of stake below 10% will allow him to start the process of formally stepping down as promoter and it improves the company’s prospects. The plan for Gehlaut to step down and bring in a strategic investor has been in the works for the last year-and-a-half as part of which Gehlaut stepped down as chairman in August 2020. He will cease to be a director on the board of the company from March 2021. IHF has now moved to a co-lending model in partnership with six banks and fellow NBFC Housing Development Finance Corp (HDFC). The company expects to slowly increase loan disbursements and ultimately grow its AUM by 20% in fiscal 2023 just through lending to individuals. It expects to end the current fiscal with an AUM Rs 70,000 crore and increase it to Rs 90,000 crore by fiscal 2023.