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Mega Deal by IIFL Home Finance as ADIA Prepares to Purchase 20% Stake for Rs. 2,200 Crore



The sovereign wealth fund Abu Dhabi Investment Authority (ADIA) plans to purchase a 20% interest in IIFL Home Finance Limited, making it one of the largest equity investments in India's affordable housing finance market. According to a filing with the BSE by IIFL Finance, the business will purchase the stake for Rs 2,200 crore, increasing the mortgage lender's worth to Rs 11,000 crore in the process. This will be the biggest equity investment made by an investor in India's affordable home finance market. On Friday morning, early trading saw an 8% increase in IIFL Finance shares.

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 for raising Rs 2,200 Cr of primary capital for a 20% stake from a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), according to a press release from the leading non-banking financial company IIFL Finance Limited.

To meet the considerable and rising demand for housing loans, IIFL Home Finance Limited stated that it has proposed to use the additional funds from the deal to continue its granular expansion strategy into new markets. "This would be one of the biggest equity investments made by a financial investor in India's affordable home finance segment. "IIFL Home Finance Limited proposes to use the additional capital to continue its granular expansion strategy into new markets to address the significant and growing demand for housing loans. The company is supported by a technology backbone that enables 100 percent digital onboarding for home loans, as well as robust credit appraisal and collection systems," it said.

IIFL Home Finance received financial advice for this deal from Avendus Capital and IIFL Securities. In the deal, IIFL Finance, which has a market cap of Rs 12,500 crore and a loan book of Rs 52,000 crore, will be valued at a higher level. On the other side, IIFL Home Finance has a loan book worth Rs 24,000 crore despite having a market value of Rs 11,000 crore. "We are thrilled to collaborate with ADIA who bring to the table long-term dedication and vast expertise assisting expanding firms," stated Nirmal Jain, founder of the IIFL Group. The investment acknowledges IIFL Home Financing's position as one of India's top providers of low-interest mortgages and how well-positioned it is to continue to focus on the sizable, enduring housing finance industry.

"IIFL Home Finance has established a solid base and is at a turning point as it uses new initiatives including co-lending, foraying into more granular products, and growing reach across Tier II and Tier III regions," stated Monu Ratra, CEO of IIFL Home Finance. We warmly extend a warm welcome to our new partners and eagerly anticipate our forthcoming collaboration.

As of March 31, 2022, IIFL Home Finance, a wholly owned subsidiary of IIFL Finance founded in 2006, had assets under management totaling Rs 23,617 Cr, 168,000 active customers throughout 16 states, and two union territories, over 200 branches, and over 3,200 staff members. The business provides development financing, loans against property, and small-ticket housing loans.


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