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Bain Capital, Baring Asia and Chrys Capital among investors bidding for Aadhar Housing Finance

bain-capital-baring-asia-and-chrys-capital-among-investors-bidding-for-aadhar-housing-finance
Bain Capital, Baring Asia and Chrys Capital among investors bidding for Aadhar Housing Finance

MUMBAI: Buyout firms

Bain Capital

, Baring Asia, Centrum,

Chrys Capital

and KKR are among investors bidding for majority stake in affordable housing lender

Aadhar Housing Finance

owned by

Wadhwan Group

, multiple sources familiar with the matter told ET.

As per the indicative offers, the investors will acquire 51 percent stake valuing the housing finance firm at around Rs 1500-2000 crore.

If the deal is struck, it could ease liquidity pressure on parent Dewan Housing Finance, a group company.

“We do not comment on market speculation,” said a spokesperson from Wadhwan Global Capital responding to ET’s emailed query. Bain Capital, Baring Asia and Centrum group declined to comment, while an email sent to Chrys Capital didn’t elicit a reply at the time of the publication.

“The last date for bidding has been extended from November 14 from November 7. The company has already received non-binding bids from these private equity and strategic players,” said one of the persons cited above. The company is expected to shortlist bids after Wednesday.

WGC holds about 70% in the company while International Finance Corporation, an arm of World Bank, owns 17%. DHFL, the flagship company of the group, too has a stake.

As a significant majority stake will be sold directly by promoters and many investors have shown interest. The future of housing finance remains bright, sources said.

The government is pursuing the “Housing for All” project by 2022 which has given a fillip to low-cost housing in the country.

Aadhar Housing has a loan book of about Rs 8,500 crore. Also, the book quality is high and it has a wide network of nearly 300 branches across the country in small towns and cities.

This is the second largest loan book after Gruh Finance in the affordable housing segment, said another source involved in the stake sale process. Such loans indicate little sign of turning bad in future.

However, there is a need to strengthen the technology and corporate governance standards in the company, the person said.

“The company may be valued in the range of Rs 1,500 and 2,000 crore. But, unbinding bids may be higher than that,” said another market source.

In FY18, Aadhar Housing Finance saw a 52% jump in net profit to Rs 99.72 crore from Rs 63.98 crore a year ago.

Aadhar Housing Finance has a diverse funding profile and its ability to tie up funding at competitive rates and maintain spreads will be critical for future growth, Mint newspaper reported citing rating firm ICRA’s report.

Aadhar Housing Finance, the ICRA report said, is dependent on bank borrowings. Its ability to diversify the funding mix and maintain costs while scaling up the portfolio will remain a key factor.


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