Indostar Capital Finance shares experienced a significant surge of up to 13% on the Bombay Stock Exchange (BSE), reaching a 52-week high of Rs 339.7 per share on a Friday trading day. The increase in share value followed the company's board's approval of the sale of its subsidiary, IndoStar Home Finance Private Limited (IHFPL), to WITKOPEEND B.V. for a substantial amount of Rs 1,750 crore. However, the initial surging momentum of the stock subsided later on, with the shares being up by 4.08% at Rs 313.65 per share on the BSE at around 9:49 AM, while the BSE Sensex was trading higher at 83,322.08, up around 137 points at the same time.
IndoStar Capital Finance, through an official exchange filing, announced the approval granted by its board for the sale of its subsidiary, IndoStar Home Finance Private Limited, to WITKOPEEND B.V., an affiliate of BPEA EQT Mid-Market Growth Partnership. The acquisition of IHFPL by WITKOPEEND B.V. for the sum of Rs 1,750 crore is subject to various approvals, including clearance from the Reserve Bank of India (RBI) and consent from lenders and shareholders. Additionally, EQT, a global private equity investor, has intentions to invest Rs 500 crore into IHFPL following the finalization of the transaction, with approval already granted by the board of IHFPL for this capital infusion.
IndoStar Capital views this transaction as a means to secure capital for accelerated growth and value creation in its core sectors of Vehicle Finance and Small Business Loans. Furthermore, EQT, which has a strategic focus on retail lending within the financial services domain in India, expressed excitement about including Indostar Home Finance in its investment portfolio, highlighting the growth potential in India's affordable housing finance segment. As a non-banking finance company (NBFC) recognized by the RBI as a systemically important non-deposit taking institution, IndoStar specializes in offering financing for both new and used commercial vehicles and affordable home finance through its subsidiary, IndoStar Home Finance Private Limited. Over the past year, Indostar Capital's shares have recorded a notable uptrend of 74.09%, outperforming the BSE Sensex's rise of 24.5% within the same period.