IIFL Home Finance Strikes Mega Deal as ADIA Set to Buy 20% Stake at Rs 2,200 Crore

In one of the largest equity investments in India’s affordable housing finance sector, the sovereign wealth fund – Abu Dhabi Investment Authority (ADIA) is set to buy a 20 per cent stake in IIFL Home Finance Limited. The company will buy the stake for 2,200 crore, after which the mortgage lender’s valuation is set to rise to 11,000 crore, IIFL Finance said in a filing with BSE. This will be the largest equity investment in the affordable housing finance sector in India by an investor. Shares of IIFL Finance were up 8 percent in early trading Friday on the news.

Leading non-bank financial company IIFL Finance Limited said today that its wholly owned subsidiary IIFL Home Finance Limited, one of the largest affordable housing finance companies in India with assets under management of Rs 23,617 crore as of March 31, 2022, has entered into Final agreements to raise INR 2,200 of seed capital for a 20 per cent stake in a wholly owned subsidiary of the Abu Dhabi Investment Authority,” IIFL Finance’s press release dated June 9, read Monday.

IIFL Home Finance Limited stated that it has proposed to use the additional capital from the transaction to continue its aggressive expansion strategy in new markets to meet the large and growing demand for housing loans. This will be one of the largest equity investments in the affordable housing finance sector in India by a financial investor. Backed by a technology backbone that enables 100 percent digital onboarding of home loans, and robust credit assessment and collection systems, IIFL Home Finance Limited is proposing to use the additional capital to continue its rigorous expansion strategy into new markets to address the large and growing demand for housing loans.”

Avendus Capital and IIFL Securities were financial advisors to IIFL Home Finance for this transaction. The deal means looking at more value in IIFL financing, which has a market capitalization 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 of IIFL Group said: “We are delighted to partner with ADIA who brings to the table a long-term commitment and rich experience in supporting a growing business. The investment recognizes IIFL Home Finance’s position as one of the largest and quality providers of affordable housing loans in India. To continue targeting the large and flexible housing finance market.”

Mono Ratra, CEO of IIFL Home Finance said, “IIFL Home Finance has built a strong foundation and is at an inflection point as it takes advantage of new strategies such as syndication, entry into more granular products and expanding reach across Tier 2 and Tier 3 regions. With our new partners, we look forward to working with them on the next stage.”

Established in 2006 as a wholly owned subsidiary of IIFL Finance, IIFL Home Finance has generated assets under management of Rs.23,617 as of March 31, 2022, with an active customer base of 168,000 across 16 states and two union territories with over 200 branches supported by over of 3200 employees. The company offers small housing loans, loans against real estate and construction financing.

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