Indiabulls Housing Finance on Thursday said it has sold part of its stake in UK-based OakNorth Bank to HighSage Ventures LLC for Rs 440 crore And the sale proceeds will bolster company’s adequacy ratio.

HighSage Ventures LLC is a Boston-based investment firm with an investor network spanning the venture capital, private equity and public equity communities.

“Indiabulls Housing Finance Limited [“the Company”] has sold a portion of its stake in OakNorth Holding Ltd. [the wholly owning parent company of OakNorth Bank Ltd.] [“OakNorth”], to HighSage Ventures LLC for ₹ 440 crores. The sale proceeds will be accretive to the regulatory net worth and the CRAR of the Company,” the country’s third largest mortgage lender said in a BSE filing.

The Indian firm plans to conclude a few other transactions on the partial stake sale in OakNorth Bank over the next few days. “The divestments in OakNorth Bank will result in boosting CRAR and shall free up capital to grow the loan book of the company,” it said.

The company had invested Rs 663 crore in November 2015 for a 40 per cent stake in OakNorth Bank. Within two years of this, in November 2017, the company recouped its investment by selling about 10 per cent stake to the Government of Singapore’s investment arm GIC for Rs 770 crore.

Founded in 2015 to address the mid-market funding gap in the UK, a highly competitive and regulated market, OakNorth Bank became profitable in just 11 months. Within four years of operations, it has grown its deposits to just under 3 billion British Pound and its loan book to over 4 billion British Pound, Indiabulls Housing Finance said.

On Wednesday, a day before selling its stake in OakNorth Bank, Indiabulls Housing Finance had said it was aiming to raise up to Rs 1,000 crore through a qualified institutional placement (QIP). The Securities Issuance Committee of the board had also approved the floor price for the QIP at Rs 206.70 per equity share, the company had said in a BSE filing on Wednesday.

The non-banking finance company (NBFC) intends to raise more capital during this month, another person privy to the fund raise plans said.

At its extraordinary general meeting (EGM) held on July 29, the board had sought shareholders’ approval for raising up to $300 million (about Rs 2,200 crore) by issuing securities through QIP or through foreign currency convertible bonds (FCCBs) during the course of the next one year.

“The company may offer a discount of not more than 5 per cent on the floor price so calculated for the issue (QIP),” Indiabulls Housing Finance said in the filing on Wednesday.

The committee will meet next week (September 14) to approve the issue price, including a discount, if any, for the equity shares to be allotted to the qualified institutional buyers (QIBs), the company said.

The intent of the QIP is to augment the long-term resources of the company and maintain sufficient liquidity for meeting funding requirements for its business activities, the company had said after the EGM in July.

“The successful issue of the securities will underline the confidence in the company, especially in the backdrop of the prolonged liquidity squeeze that the NBFC/HFC sector is facing and business disruption due to COVID-19.

“Infusion of fresh capital under the current circumstances will demonstrate to key industry participants such as lenders – especially debt market investors and rating agencies of the company’s ability to tap equity markets periodically to fund growth,” it said in a summary of the outcome of the EGM on July 29.

The company’s shares were trading 3.4 per cent lower at Rs 194.30 on the BSE.