Farallon to invest Rs 200cr in Indiabulls units

Farallon Capital and its affiliates will invest over Rs 200 crore in two ompanies - Indiabulls Credit Services and Indiabulls Housing Finance.

According to a release issued by Indiabulls to the BSE today, the two subsidiaries have been valued at over Rs 1,250 crore for making the equity investments.

"The investment follows the Rs 88 crore investment Farallon Capital had made in Indiabulls Credit Services in January 2005, taking the total investments by Farallon Capital in the companies to around Rs 290 crore within a year. The company will invest Rs 268 crore in the two subsidiary companies," the release added.

Farallon will invest Rs 112.50 crore for 1/3 rd stake in the housing finance subsidiary, valuing the company at Rs 337 crore, the release said. "The housing finance subsidiary will issue 4.5 crore shares to Farallon at Rs 25 per share of Rs 10 each.The company will invest an additional Rs 80 crore and retain management control," the release added.

Post the new investments, the equity capital of Indiabulls Housing Finance will increase from Rs 10 crore to Rs 202.50 crore. The shareholding of Farallon will be 33.3%, and Indiabulls Financial Services will hold 66.7% in the company," the release said.

Farallon will also make a follow-on investment of Rs 89.10 crore in the equity capital of Indiabulls Credit Services by paying Rs 55 per share of Rs 10 each by subscribing to an additional 1.6 crore shares. "Farallon had earlier paid Rs 22 per share and invested a total of Rs 88 crore for 33% stake in Indiabulls Credit Services. The company will invest Rs 178 crore in the company for an additional 3.2 crore shares. Post the new investments, the shareholding of the company in Indiabulls Credit Services will increase from 50.7% to 55.3%, and the shareholding of Farallon in Indiabulls Credit Services will remain unchanged at the existing 33.3%. Indiabulls Credit Services will have an enhanced equity base of Rs 400 crore," the release added.

While the housing finance subsidiary of Indiabulls is engaged in the business of providing home loans and loans against property, Indiabulls Credit Services is focused on providing consumer loans to underserved middle markets, and the segment that is unable to access credit from banks, the release said.