Indiabulls shares to be in focus on Tuesday | Here's why

Indiabulls share price will remain in focus on Tuesday, 15 September, after the company announced it has entered into a definitive agreement with Fintech Cloud to acquire a 70% stake in the company.

Indiabulls shares closed 5% higher on Friday, ending the session at ₹25.89 apiece on BSE.

Indiabulls stake acquisition details

In an exchange filing on Friday, September 11, Indiabulls said that it has signed a definitive agreement to acquire a 70% stake in Fintech Cloud Private Ltd for ₹1,050 crore, implying a valuation of ₹1,500 crore for the company.

The acquisition will be undertaken through a scheme approved by the National Company Law Tribunal (NCLT), under which Indiabulls will also assume control of Fintech Cloud’s board.

Fintech Cloud is a technology solutions provider that operates as a Loan Service Provider (LSP) for regulated entities. It offers technology-driven solutions and support to Non-Banking Financial Companies (NBFCs) across loan origination, underwriting and servicing.

As part of the proposed transaction, Indiabulls will acquire a 70% stake in Fintech Cloud’s issued, subscribed and paid-up equity share capital. It will also have the right to appoint a majority of directors to the target company’s board with immediate effect.

The ₹1,050 crore acquisition consideration will be paid by issuing up to 21 crore fully paid-up equity shares of Indiabulls to the shareholders holding the 70% stake in Fintech Cloud.

The share issuance will be undertaken through an NCLT-approved Scheme of Amalgamation and will comply with applicable pricing norms, including those prescribed under the Securities and Exchange Board of India (SEBI) Issue of Capital and Disclosure Requirements (ICDR) regulations.

Indiabulls said the acquisition will mark its entry into the fintech sector by providing technology solutions to NBFCs.

According to the company’s filing, the transaction is not a related-party transaction. It added that its promoter, promoter group and group entities do not have any interest in Fintech Cloud.

The proposed deal is subject to approvals from the NCLT, SEBI and stock exchanges, as well as other applicable regulatory and shareholder clearances. Indiabulls expects the transaction to be completed within 9-12 months.

Indiabulls share price performance

Indiabulls shares have delivered a mixed performance across different time frames. The stock has gained 0.82% over the past one week, indicating a marginal recovery in the near term. However, on a one-month basis, the stock has declined 8.06%, pointing to some recent selling pressure and volatility.

Despite the recent weakness, the stock has generated strong returns over the medium term. Indiabulls shares have surged 144.71% in the last six months, while the stock is up 52.47% on a year-to-date basis. Over the past one year, the shares have gained 41.94%, reflecting a significant improvement compared with their longer-term performance.

However, the stock's longer-term returns remain weak. Indiabulls shares have declined 72.58% over the past five years, while the 10-year return stands at a modest 15.37%.

Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.