Shares of IndoStar Capital Finance surged over 13 percent in early trade on September 20, following the sale of its subsidiary IndoStar Home Finance for Rs 1,750 crore. The buyer, Witkopeend BV, is an Amsterdam-based affiliate of the global private equity firm BPEA EQT Mid-Market Growth Partnership.
At 9:37 am, IndoStar’s stock, part of Madhusudan Kela’s portfolio, was trading at Rs 315.6 on the NSE, up 4.6 percent after hitting a fresh 52-week high.
The deal, subject to approval from the Reserve Bank of India and shareholder and lender consent, will see EQT infuse Rs 500 crore into IndoStar Home Finance upon the closure of the transaction. This gives IndoStar fresh capital, which was greatly required for the growth in the core segments the company is chasing-vehicle finance and small business loans.
IndoStar chairman Bobby Parikh said the sale represents a strategic specificity by which the company will be able to dwell only on core business areas. Motilal Oswal continues to maintain Buy rating on the stock with a target price of Rs 290.
In the last one year, shares of IndoStar have jumped 80%, outpacing a 25% gain in the Nifty 50 Index over this period.
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Source: Moneycontrol
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