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IDBI plans to sell home fin arm IDBI Bank is planning to sell its Pune-based wholly-owned subsidiary, IDBI Homefinance (IHFL), according to a person familiar with the development. A proposal to sell the home finance subsidiary is expected to be taken up by the board of IDBI Bank shortly, the source said. The book value of IHFL at the end of March 2007 was Rs 290 crore. Market watchers say the book value would have increased slightly now. The proposed sale is likely to have been prompted by a view that a separate subsidiary is not required for mortgage lending when the same business is also undertaken at IDBI Bank. IHFL was previously Tata Home Finance. The name of the mortgage lender was changed as it was acquired by IDBI Bank in September 2003. IHFL's home loan portfolio as on March 31, 2008 was Rs 2,710 crore, up Rs 563 crore from a year earlier. The mortgage lender, which has 18 branches in major cities, had reported a net profit of Rs 30 crore for 2007-08. IDBI bank is likely to give the mandate to IDBI Capital Market Services for finding a suitor. When contacted, a senior official of IDBI Bank said, "We are examining various options. We have still not made up our mind." Recently, Melwyn Rego who was heading IHFL was transferred back to the bank's domestic resources development (DRD) department. MH Kulkarni has now taken over as the MD & CEO of IHFL. Interestingly, Tata Capital, the latest entrant in the home loan segment,will be shortly filing its application with the National Housing Board to start its housing finance business. Learning Center- http://learning.investorline.co.in/ Mutual funds - http://mutualfunds.investorline.co.in/ Life Insurance - http://insurance.investorline.co.in/ Industry players opine that non-banking finance companies (NBFCs) and buyout funds are likely to be the interested in acquiring IHFL. Banking and financial services sector has emerged as the most active space for private equity (PE),capturing more than 70% of the total deal values in the recent past. There has been a huge interest interest in the booming housing loans market in India, with a sharp rise in housing loan disbursements. The share of housing loans in total bank credit rose sharply from 3.2% in 1998-99 to 11.8% in 2006-07. Within personal loans, the share of housing loans too rose sharply from 27.7% by end-March 1998 to 52.8% at end-March 2007. Home loans have increased by over 30% in the last few years, but the grow is expected to slow to 8-10% this year. Early this year, global private equity firm, the Carlyle group invested $28 million in Chennai-based Repco Home Finance, a subsidiary of Repatriates Co-operative Finance and Development Bank. This was followed by French banking group BNP Paribas acquiring close to 50% stake in Sundaram Home Finance for Rs 196.98 crore. Similarly, AIG Capital bought 75% in Chennai's Vivek Hire Purchase. Barclays and Societe Generale bought into Chennai's Rank Investments and Apeejay Finance respectively. Visit our site at – http://newsroom.investorline.co.in/ Learning Center- http://learning.investorline.co.in/ Mutual funds - http://mutualfunds.investorline.co.in/ Life Insurance - http://insurance.investorline.co.in/ Investor Journal - http://research.investorline.co.in/ Latest News - http://investorline.co.in/blogger/?q=aggregator/categories/1 News Resources - http://investorline.co.in/blogger/?q=aggregator/sources Newscatcher- http://catcher.investorline.co.in/ Newsgroups- http://groups.google.com/group/india-investor --~--~---------~--~----~------------~-------~--~----~ Get latest market updates & search internet right from your browser-download our toolbar here- http://investorline.ourtoolbar.com/ Visit our site at – http://investorline.co.in/ Newsroom: http://newsroom.investorline.co.in/ Learning Center- http://learning.investorline.co.in/ Mutual funds - http://mutualfunds.investorline.co.in/ Life Insurance - http://insurance.investorline.co.in/ Investor Journal - http://research.investorline.co.in/ Newscatcher- http://catcher.investorline.co.in/ Interested in Financial Planning-Let us Contact you- http://spreadsheets.google.com/viewform?key=pb_z4f1_zGMg4iBBFT3-SWQ&email=true If you like the site then promote it here- https://www.freetellafriend.com/tell/?url=http://investorline.co.in/blogs/news Create your own free blog on- http://investorline.co.in/blogger Visit this group at http://groups.google.com/group/india-investor -~----------~----~----~----~------~----~------~--~---
