One of the largest equity investments in the affordable housing finance segment in India, sovereign wealth fund Abu Dhabi Investment Authority (ADIA) is set to buy 20 per cent stake in IIFL Home Finance Ltd. The company will buy the stake for Rs 2,200 crore, after which the valuation of the mortgage lender will increase to Rs 11,000 crore, IIFL Finance said in a filing with the BSE. This is going to be the biggest equity investment in the affordable housing finance segment India by an investor. Shares of IIFL Finance On the news, there was a gain of 8 percent in early trade on Friday.
“Leading Non-Banking Financial Company” IIFL Finance Limited Today its wholly owned subsidiary IIFL Home Finance Ltd., one of India’s largest affordable housing finance companies with assets under management of Rs 23,617 crore as on March 31, 2022, has made a primary capital for have signed definite agreements to raise Rs 2,200 crore. 20 per cent stake from a wholly owned subsidiary of Abu Dhabi Investment Authority (ADIA),” read an IIFL Finance press statement on Monday, June 9.
IIFL Home Finance Ltd said it has proposed to utilize the additional capital from the deal to continue its expansion strategy in new markets to meet the critical and growing demand for housing loans. “This will be one of the largest equity investments in the affordable housing finance segment in India by a financial investor. Backed by a technology backbone enabling 100% digital onboarding for home loans, robust credit appraisal and collection systems, IIFL Home Finance Limited continues its massive expansion strategy into new markets to meet the critical and growing demand for housing. It is proposed to use the additional capital to keep loan,” it said.
Avendus Capital and IIFL Securities were the financial advisors to IIFL Home Finance for this transaction. The deal would mean seeing higher value in IIFL Finance, which has a market cap of Rs 12,500 crore and a loan book of Rs 52,000 crore. On the other hand, with a market value of Rs 11,000 crore, IIFL Home Finance has a loan book of Rs 24,000 crore.
Nirmal Jain, Founder, IIFL Group, said, “We are delighted to partner with ADIA who bring long-term commitment and rich experience to support growing businesses. This investment will position IIFL Home Finance as one of India’s affordable housing loans. Recognized as one of the largest providers and how well placed it is to continue to target the large, flexible housing finance market.
Monu Ratra, CEO, IIFL Home Finance said, “IIFL Home Finance has built a strong foundation and is at a turning point as it leverages new strategies like co-lending, forays into more granular products and Tier II and expands reach into Tier III regions. We welcome our new partners and look forward to working with them in the next phase.
Established in 2006 as a wholly owned subsidiary of IIFL Finance, IIFL Home Finance has created assets under management of Rs 23,617 crore as on March 31, 2022, with over 200 branches across 16 states and two union territories. Has an active customer base of 168,000. by over 3,200 employees. The company offers small-ticket housing loans, loan against property and construction finance.
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