Mumbai: A day after the RBI rejected merger proposal with Lakshmi Vilas Bank, Indiabulls Housing Finance on Thursday said the "uncertainty" about the deal is over and that the company has a stronger balance sheet after the massive cleaning up of its stable.
On Wednesday, the Reserve Bank had rejected a proposal to merge Indiabulls Housing Finance Ltd (IBHFL) with the Tamil Nadu-based troubled lender. The deal was announced in April and the no from the Mint Road came despite the plan receiving go-ahead from other regulators.
While acknowledging that the RBI's rejection was a bit surprising, IBHFL vice-chairman and managing director Gagan Banga said however, the uncertainty over the deal has now ended helping them focus more aggressively at what is good at doing.
The uncertainty over the deal as well as legal woes have led to a run on the stock valuations of both the companies which have lost nearly half of their pre-merger-announcement value.
"My view is that, as a housing finance company, we are a lot, lot more stable and stronger now than we were six months ago.
"Our balance-sheet is much thinner and stronger with negligible debt and now our whole energies can be focused to excel more in what we have been excelling in all these years as a housing finance company," Banga said.
In recent months, IBHFL, which has been in business for nearly two decades, has been selling stakes in realty ventures--a move that has also helped it strengthen its balance sheet in the run-up to the aborted merger.
The objective behind the merger bid was to get better granularity and stability to its funding sources through the savings deposits, Banga said.
"From that perspective, yes, I am a bit disappointed," Banga said even as he added the RBI has a stated position of not allowing NBFCs to take over banks.
