The Hindu Business Line : Mittal takes stake in Indiabulls Credit

NRI steel magnate Mr L.N. Mittal's company has picked up an eight per cent stake in Indiabulls Credit for around Rs 90 crore. Mittal-promoted LNM India Internet Ventures Ltd (LNMIIVL) will acquire 8.2 per cent stake in Indiabulls Credit Services Ltd (ICSL), a majority-owned subsidiary of Indiabulls Financial Services Ltd (IFSL), for about Rs 90 crore.

LNM India will pay about Rs 62 per share for investing Rs 45 crore in Indiabulls Financial and making secondary purchase of shares for an equal amount. The investment values ICSL at about Rs 1,100 crore, IFSL said in a release.

ICSL will issue 72.10 lakh shares to LNM India for about Rs 45 crore. LNM India will hold a total of 1.44 crore shares in Indiabulls Credit.

After the new investments, the shareholding of IFSL in Indiabulls Credit will decrease from 55.3 per cent to 53 per cent due to the issuance of new shares. Indiabulls Credit will have an enhanced equity capital base of about Rs 460 crore with the new investment, it said.

Indiabulls said the investment by Mittal followed US-based Farallon Capital's investments in ICSL. Farallon recently paid Rs 55 per share and invested $20 million in the company, while last year it had paid Rs 22 per share to buy 33 per cent stake for Rs 88 crore in ICSL. After today's deal, Farallon's stake in ICSL will decrease to 32 per cent.

Mr Mittal has been an investor in IFSL since 2000.

IFSL's scrip on the BSE on Thursday opened at Rs 235.30 and closed at Rs 246.50, up by over Rs 11.

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