IndoStar Capital close to buying ICICI Home Fin for ₹2,000 crore
MUMBAI: Two years after putting its wholly owned subsidiary ICICI Home Finance on the block, ICICI Bank Ltd is close to selling a majority stake in the company to IndoStar Capital for ₹2,000 crore, two people directly aware of the development said.
Everstone Capital-backed IndoStar will pay ₹2,000 crore for a 67% stake in the company, valuing the home finance unit at a little under ₹3,000 crore, while the private sector lender will continue as a minority shareholder with a 33% stake, the people cited above said on condition of anonymity.
Once closed, the transaction will mark the end of a longdrawn sale process during which ICICI Bank came close to selling its home finance arm twice but a deal did not materialise owing to last minute disagreements.
Other contenders for ICICI Home Finance included bulge bracket PE funds TPG, India Value Fund Advisors and Barings Private Equity Asia.
Mint had reported on December 12 last year that the private sector lender was looking at a valuation of close to ₹2,400 crore, or about two times the book value of the housing finance business, for a 100% stake but lowered it to ₹2,200 crore as talks with TPG resumed in June last year. When a sale was almost finalized with TPG, IVFA and Baring PE Asia offered a higher price of ₹2,400 crore in August.
The talks with the two private equity funds broke down two months later after both sides could not agree on some operational issues including the role of a senior ICICI Bank employee who was tipped to join as head of the housing finance company, Mint had reported.
The sale process revived after R Sridhar, who was earlier a senior advisor to TPG, moved to IndoStar as executive vicechairman and CEO in April.
“ICICI Bank has been receiving proposals from interested parties regarding its stake in ICICI Home Finance Company. However, no proposal has been taken to the board of directors of the bank for consideration,” said an ICICI bank spokesperson.
A spokesperson for IndoStar Capital said the company would not comment on speculation.