ADIA will Buy 20% of IIFL Home Finance, Making it the Largest such Investment in the Market

The Abu Dhabi Investment Authority (ADIA), a sovereign wealth fund, will buy a 20% share in IIFL Home Finance for Rs 2,200 crore, valuing the mortgage lender at Rs 11,000 crore. This will be a financial investor’s largest equity investment in India’s affordable housing finance market.

The increased cash will be used by IIFL Home Finance, a wholly owned subsidiary of IIFL Finance NSE 11.74%, to continue its development into new areas in order to meet rising demand for housing loans.

The transaction will increase the value of IIFL Finance, which has a loan book of 52,000 crores and a market capitalization of 12,500 crores. IIFL Home Finance has a loan book of 24,000 crore rupees and a market capitalization of 11,000 crore rupees.

On Thursday, IIFL Finance’s stock remained unchanged at $329. IIFL Group chairman Nirmal Jain confirmed the acquisition, saying ADIA will bring long-term commitment and extensive experience in aiding rising firms.

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“Given the financial market’s instability, rising home loan interest rates, and tighter liquidity,” he added, “the equity investment is opportune and at the right time to enable the company take advantage of probable sector consolidation and market expansion.”

IIFL Home Finance has 168,000 customers and 230 branches. Small-ticket mortgages, property-based loans, and construction financing are all available through the organisation. T

hrough its proprietary Kutumb platform, it also encourages the construction of cheap green buildings in conjunction with housing developers and experts in order to decrease carbon emissions and offer cost-effective constructions.

According to ADIA executive director Hamad Shahwan Aldhaheri, the investment in IIFL Housing will help the company meet demand in India’s huge, underserved, and fast-growing affordable housing finance sector.

IIFL Finance is 25% owned by Nirmal Jain and his family. Fairfax Group, led by Canadian investor Prem Watsa, and CDC Group plc, based in the United Kingdom, control 22.3% and 7.7% of IIFL Finance, respectively. Other investors in IIFL Finance include General Atlantic, Bain Capital, and The Capital.

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HDFC NSE -3.59% Capital raised $1.8 billion from a group of investors led by ADIA for its third low-cost housing fund earlier this year.

With $800 billion in assets under management, ADIA has a significant presence in India. Flipkart, Reliance NSE -3.30% Retail, Mindspace REIT, HDFC Capital, Mphasis NSE -2.46%, Paytm, Nykaa, and Mobikwik are among its major investments.

ADIA has invested more than $3 billion in India since 2018. ADIA purchased 5.8 million shares of Indiabulls NSE -1.03% Housing in December, for a 1.26% holding. In 2020, ADIA paid Rs 5,513 crore for a 1.2% interest in Reliance Retail.

Coforge NSE -2.12%, Bharat Dynamics, Birlasoft NSE -2.61%, Intellect Design, Inox Leisure NSE -2.07%, GE Shipping NSE -2.61%, and Chemplast Sanmar NSE -1.48% are among ADIA’s almost 25 listed firms.

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