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Abu Dhabi Investment Authority to buy Rs. 2200 cr stake in IIFL Home Finance

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The Abu Dhabi Investment Authority (ADIA) plans to purchase a 20% stake in IIFL Home Finance Limited for Rs.2,200 crore. According to IIFL Home Finance Limited, the additional money from the ADIA purchase would be used to continue its granular expansion plan into new markets.

Abu Dhabi Investment Authority (ADIA) is expected to purchase a 20% interest in IIFL Home Finance Limited in one of the largest equity investments in India’s affordable home finance market. The business will pay Rs 2,200 crore for the share, after which the mortgage lender’s valuation would rise to Rs 11,000 crore, according to a filing with the BSE by IIFL Finance. This would be an investor’s largest equity investment in India’s affordable home financing market.

According to a press release from IIFL Finance, “On June 10, 2022, leading non-banking financial company IIFL Finance Limited announced that its wholly owned subsidiary IIFL Home Finance Limited, one of India’s largest affordable housing finance companies with assets under management of Rs 23,617 Cr as of March 31, 2022, has entered into definitive agreements to raise Rs 2,200 Cr of primary capital for a 20% stake from an Abu Dhabi Investment Authority (ADIA).”

On the announcement, shares of IIFL Finance surged by 8% in early trading on Friday.

IIFL Home Finance Limited stated that the additional money from the transaction would be used to continue its granular expansion strategy into new areas in order to meet the considerable and rising demand for housing loans.

IIFL Home Finance Limited added, “This would be a financial investor’s largest equity investment in India’s affordable home financing market. Backed by a technology backbone that enables 100% digital onboarding for house loans, as well as comprehensive credit evaluation and collection procedures.”

IIFL Home Finance’s financial advisors for this transaction were Avendus Capital and IIFL Securities. The transaction would imply a higher valuation for IIFL Finance, which has a market capitalization of Rs 12,500 crore and a loan book of Rs 52,000 crore. IIFL Home Finance, on the other hand, has a loan book worth Rs 24,000 crore and a market value of Rs 11,000 crore.

Nirmal Jain, Founder, IIFL Group, stated, “We are happy to work with ADIA who bring to the table long term dedication and significant expertise of assisting developing businesses. The investment acknowledges IIFL Home Financing’s position as one of India’s top suppliers of affordable home loans, as well as its ability to continue to target the vast, resilient housing finance market.”

Monu Ratra, CEO of IIFL Home Finance, added, “IIFL Home Finance has developed a strong foundation and is at an inflection moment as it uses new initiatives such as co lending, foraying into more granular products, and growing reach across Tier II and Tier III areas. We welcome our new partners and look forward to collaborating with them in the next phase.”

IIFL Home Finance, founded in 2006 as a fully owned subsidiary of IIFL Finance, with assets under management of Rs 23,617 Cr as of March 31, 2022, with an active client base of 168,000 throughout 16 states and two union territories, over 200 branches, and over 3,200 staff. The firm provides small-ticket home loans, property loans, and development financing.

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