Indiabulls Housing Finance Ltd has acquired the entire 42.5 per cent holding of Amaprop Ltd in its subsidiary, Indiabulls Finance Company Pvt Ltd for Rs 260 crore ($ 42.5 million), as per a market disclosure.
Amaprop, a US-based private equity firm, had invested in Indiabulls Finance, a non-banking finance company, in 2005 for around Rs 130 crore ($30 million back then). This means it will encash around 2x in Indian currency in its eight-year old investment though on repatriation its returns would translate into 41 per cent gains in US dollar terms.
A dispute arose between Indiabulls and Amaprop on the latter exercising its put right under the shareholders agreement, as the put price arrived at in accordance with the agreement was rejected by RBI being in excess of the fair market value as per the then prevailing pricing guidelines.
The dispute was concluded through an arbitration process in New York, where the arbitral tribunal passed an award requiring Indiabulls to pay Rs 192 crore along with interest and costs to Amaprop for acquiring the 42.5 per cent stake.
Majmudar & Partners represented and advised Amaprop. Amaprop was also represented by US law firm Orrick, Herrington & Sutcliffe LLP. Fox Mandal, Delhi, represented Indiabulls.
With the buyback, Indiabulls Finance has become a wholly owned arm of Indiabulls Housing Finance, one of the largest private housing finance firms in the country. Indiabulls Housing Finance has a loan book of Rs 37,000 crore (having grown at a CAGR of 26 per cent in the last five years).
Shares of the housing finance company closed at Rs 195, down 0.96 per cent on the BSE in a strong Mumbai market on Thursday.
(Edited by Joby Puthuparampil Johnson)