ICICI Home Finance, the mortgage lending unit of ICICI Bank may sell its 70% stake to Indostar Capital Finance. The capital finance company is negotiating with the ICICI bank’s finance venture for acquisition of their stake.
The non-banking finance company which is funded by Everstone Capital has offered to pay ₹2,000 crore for the stake. But there seems to be no sign of confirmation. This is the third time when ICICI Bank have tried to sell its home finance unit. Earlier, the bank was close to sell its entire stake to private equity fund India Value Fund Advisors and Baring Asia. Before that, PE firm TPG had also offered to buy the mortgage unit. However, no proposal has been taken to the board of directors of the bank for consideration.
As on March 31, 2017 the net worth of the company was ₹1,903 crore. ICICI Home Finance posted a net profit of ₹183 crore for the year ended March 31, 2017, compared with ₹179 crore the previous year.
Well-established HFCs have started witnessing slowness in their core business, partly due to increasing competition from banks and partly on account of scores of new HFCs entering the housing finance arena aggressively.
IndoStar has a 100%-owned home finance subsidiary, IndoStar Home Finance, which received the licence in August last year.