Dewan Housing Finance is set to take over Vysya Bank Housing Finance for around Rs 23 crore. It will take over ING Vysya Bank's entire 85.6 per cent stake in Vysya Bank Housing Finance.

Dewan had a housing loan portfolio worth Rs 950 crore at the end of March 2003, and Vysya Bank Housing Finance has a portfolio of Rs 200 crore. The shares will be acquired at Rs 38.14 each.

Speaking to Business Standard, Dewan Housing Finance Managing Director Kapil Wadhawan said: "We found this a lucrative acquisition after undertaking due diligence. Since we are both strong in south India, we wanted to increase our bulk presence there."

The acquisition will enhance Dewan Housing Finance's portfolio base and help it enter various segments in the south.

The company has informed the Bombay Stock Exchange that the two boards are scheduled to meet tomorrow to complete the transaction.

The memorandum of understanding was signed a few months ago and the formal transfer of shares in favour of Dewan Housing Finance will be finalised. "The Board of Vysya Bank Housing Finance will be restructured thereafter," Dewan Housing said in its notice to the BSE.

"We will have an 85.6 per cent stake in Vysya Bank Housing Finance because we will have bought the entire shareholding of the bank," Wadhawan explained. He, however, declined to reveal who would continue to hold the balance stake.

Recently, IFC, Washington, gave Dewan Housing Finance a loan of about $13 million.