The Abu Dhabi Investment Authority (ADIA) has picked up a 20 per cent stake in IIFL Home Finance for Rs 2,200 crore, a statement said. The Abu Dhabi sovereign wealth fund will make the investment through a wholly-owned subsidiary, said IIFL Home Finance, which is among the largest affordable housing financiers with assets under management of Rs 23,617 crore.
IIFL Home Finance has entered into a definitive agreement for raising Rs 2,200 crore of primary capital for a 20 per cent stake from a wholly-owned subsidiary of ADIA.
The deal completion is subject to regulatory approvals, it said in a statement on Friday. On completion, the deal will be one of the largest equity investments in the affordable housing finance segment, by an external investor. IIFL Home Finance will use the capital to continue its granular expansion strategy into new markets to address the significant and growing demand for housing loans, Nirmal Jain, the IIFL Group founder said.
This investment aims to support the company for its next phase of growth, as it meets the significant demand in the country’s large, under-served and fast-growing affordable housing finance market, said Hamad Shahwan Aldhaheri, an executive director at the private equities department in ADIA. Established in 2006, IIFL Home Finance has an active customer base of 1,68,000 across 16 states and two Union Territories with over 200 branches served by over 3,200 employees.
The company offers small-ticket housing loans, loans against property and construction finance. It also actively supports construction of green affordable buildings in collaboration with housing developers. Monu Ratra, the chief executive at IIFL Home Finance said the company is at an inflection point as it leverages new strategies like co-lending, and launching more granular products and expanding the reach across small towns.
The domestic affordable housing finance market is USD 150 billion and is projected to grow rapidly.
Established in 1976, ADIA is a globally-diversified investment institution of the government of Abu Dhabi. Avendus Capital and IIFL Securities were financial advisors to IIFL Home Finance for the deal.