IndoStar confirms Brookfields investment; Stock down marginally

Mumbai-based non-banking financer, IndoStar Capital Finance, in its statement to the stock exchanges confirmed about an investment by Brookfield, after market hours on Thursday.

IndoStar will receive investment from Brookfield Business Partners, of nearly Rs 1,225 crore via equity shares as well as compulsorily convertible preference shares on a preferential allotment basis. The press release by the company disclosed an increase in the authorised share capital and respective shares. The authorised share capital will increase to Rs 165 crore from Rs 110 crore (as of December 2019-end). The number of shares will increase to 15,25,00,000 equity shares and 1,25,00,000 preference shares. After the changed capital structure, the shareholding of promoter will be at 70.41 per cent (pre-conversion of preference shares).

Investment in non-banking sector firm by the private equity company is first of its kind in India. The management commentary mentioned that the primary investment by Brookfield is aimed to support sustained growth of IndoStar retail lending business. Brookfield will hold a minimum of 40 per cent in IndoStar after primary investment and open offer.

At 11.15 am on Friday, the stock traded at Rs 290 per share, down by nearly half a per cent on BSE.