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EQT’s acquisition comes as India’s housing finance sector continues to grow.
EQT’s BPEA Mid-Market Growth Partnership fund has agreed to acquire a 100 per cent stake in Indostar Home Finance, an Indian affordable housing finance company, for Rs 1,750 crore, the private equity firm said in a press statement today.
Indostar Home Finance is a wholly owned subsidiary of Indostar Capital Finance.
The fund will also invest an additional Rs 500 crore to fuel the company’s geographic expansion and digital transformation.
Founded in 2017, Indostar Home Finance focuses on providing affordable mortgages to retail customers in India’s Tier-II to Tier-IV cities. The company has grown its assets under management to Rs 2,400 crore and supported over 39,000 low-income homeowners and small businesses. With a network of more than 130 branches across nine states, the company has achieved a compound annual growth rate of 32 per cent over the last three years, stated the press release.
“We are excited to embark on this new journey with EQT, who shares our vision and whose partnership will significantly help advance our mission of delivering affordable housing finance solutions across India,” said Shreejit Menon, chief executive officer, Indostar Home Finance.
EQT’s acquisition comes as India’s housing finance sector continues to grow, driven by government support, rising affordability, and increasing urbanisation.
According to Crisil, the housing finance market is valued at Rs 30 lakh crore, but the country’s mortgage-to-GDP ratio of 12.3 per cent remains significantly lower than in developed markets like the US and UK at 60 per cent, signalling a long-term growth opportunity.
“Retail lending is a key investment theme for EQT within financial services in India,” said Ashish Agrawal, partner, EQT Private Capital Asia. “India’s affordable housing finance sector represents a long-term growth opportunity supported by secular demand drivers, favourable government policies, and resilient asset quality across economic cycles.”
First Published: Sep 20 2024 | 10:51 AM IS