IndoStar Capital calls off deal to buy ICICI Home Finance
Mumbai: Everstone Capital-backed IndoStar Capital Finance Ltd has called off a deal to acquire ICICI Home Finance Co. Ltd owing to synergy issues, IndoStar’s chief executive officer (CEO) R. Sridhar said.
Instead, the non-banking finance company (NBFC) is looking to expand its home loan book through its subsidiary IndoStar Home Finance, which started operations in August last year.
“There was a problem of alignment of objectives when it came to the acquisition of ICICI Home Finance,” said Sridhar.
“We are open to acquiring portfolios, but we are currently ramping up our presence,” he added.
Indostar had been looking to buy a 67% stake in ICICI Home Finance for Rs2,000 crore.
The non-banking finance company initiated discussions with the unit of ICICI Bank Ltd after Sridhar moved to IndoStar as executive vice-chairman and chief executive in April this year, Mint reported on 4 July.
In his earlier role as senior advisor to TPG Capital, Sridhar had tried to seal a deal with ICICI Bank to buy the home finance unit, but the transaction failed as other private equity firms like True North (Managers) and Baring PE Asia offered a higher price. ICICI Home Finance’s talks with these two private equity funds also broke down two months later after they failed to agree on key operational issues, Mint reported.
IndoStar, which was predominantly into corporate lending and advancing loans against property, is now focused on expanding its retail lending business.
The NBFC is looking to open branches across 15 states in the next three years, which will be used to sell vehicle and housing loans to middle income customers.
“We are looking to grow the retail loan business much faster than the corporate loan book. Our aim is to grow the assets under management by five times to Rs25,000 crore by 2021,” said Sridhar.