Abu Dhabi Investment Authority (ADIA), a sovereign wealth fund of the Gulf emirate, has agreed to buy a 20% stake in IIFL Home Finance Ltd for Rs 2,200 crore ($283 million).
IIFL Home Finance plans to use the primary capital to continue its expansion strategy into new markets to meet growing demand for housing loans, its parent company, non-bank lender IIFL Finance Ltd, said in a statement.
“The investment recognizes IIFL Home Finance’s position as one of India’s largest providers of affordable housing loans and how well it is placed to continue to target the large, resilient housing finance market,” said Nirmal Jain, founder, IIFL Group.
ADIA is the second bulge-bracket overseas investor to back an IIFL Group company this year. In March, alternative investment firm Bain Capital agreed to acquire a 24.98% stake in IIFL Wealth Management Ltd from General Atlantic and Fairfax India Holdings Corporation for Rs 3,680 crore ($485 million).
IIFL Home Finance was set up in 2006. The affordable housing finance company had assets under management of Rs 23,617 crore as of March 31, 2022. The deal completion is subject to regulatory approvals.
It has customer base of 168,000 across 16 states and two union territories with over 200 branches backed by over 3,200 employees. The company offers small-ticket housing loans, loans against property and construction finance.
“This investment aims to support the company for its next phase of growth, as it meets the significant demand in India’s large, under-served and fast-growing affordable housing finance market,” said Hamad Shahwan Aldhaheri, Executive Director of the Private Equities Department at ADIA.
Avendus Capital and IIFL Securities were the financial advisors to IIFL Home Finance for this transaction.