Are we witnessing a turnaround story in Indiabulls Housing Finance?

The shares of Indiabulls Housing Finance Ltd surged 11.69 per cent.

On November 25, the shares of Indiabulls Housing Finance Ltd surged 11.69 per cent. The stock opened at Rs 124.85 and made an intraday high and low of Rs 139.25 and Rs 123.85. 

Indiabulls Housing Finance Ltd is India’s third-largest housing finance company. As per the September quarter, the company has a balance sheet size of Rs 75,812 crore. It has over 130 branches located in 92 towns and cities across India. 

In the past, the company was struggling to operate its business due to unprofessional company management by the promoter. However, for the last few years, the company is adopting a de-promoterisation and institutionalisation approach, where the promoter is selling his stake, while large institutional players are welcomed for their investments into the business. One of the world’s largest private investment company, “Blackstone” took a significant stake in Indiabulls Housing Finance to take control of the corporate decision-making and benefit from the established market position that the company holds in the housing finance space. Since then, the company has turned its business strategy to focus on co-lending with various banking partners, adopting an asset-light business model. 

In the second quarter that ended on September 2022 (Q2FY23), Indiabulls Housing Finance Ltd reported a net profit of Rs 289.4 crore, as against Rs 286.3 crore reported in the same quarter of FY22. The consolidated net profit for the June quarter was Rs 286.64 crore. The management expects a 10% loan growth for FY23.   

The company has a market capitalisation of Rs 6500 crore. The stock has a 52-week high and low of Rs 282.6 and Rs 89, respectively.