PE firm EQT acquires Indostar Home Finance for Rs 1,750 crore

New Delhi: EQT, a private equity firm, has agreed to purchase the entire ownership of Indostar Home Finance, a subsidiary of Indostar Capital Finance Limited, for Rs 1,750 crore (USD 210 million). The company in Sweden declared that the mortgage firm would be acquired by the BPEA Mid-Market Growth Partnership, pending regulatory approvals, as stated in a joint statement released on Friday. Established in 2017, Indostar Home Finance offers cost-effective home loans to individual customers in tier 2 to tier 4 cities in India and has assisted more than 39,000 low-income homeowners and small enterprises.

In the past three years, the company has quickly grown its assets under management to over Rs 2,400 crore, with a 32 percent compounded annual growth rate. Indostar Home Finance operates a large network of over 130 branches in nine states and has a workforce of more than 1,000 employees. It was announced that the MMG fund will inject Rs 500 crore of new capital into Indostar Home Finance in order to help drive its future expansion.

EQT plans to widen the company's geographic presence and speed up its digital transformation journey by utilizing EQT's internal digitalization skills, network of experienced industry advisors, and expertise in go-to-market strategies, according to the statement. As per a calculation, the housing finance industry is currently valued at over Rs 30 lakh crore. The low-cost sector has experienced significant expansion due to backing from the government, increasing affordability, and urbanization. Yet, India still faces a notable lack of housing, as shown by its mortgage to GDP ratio of 12.3 pc, significantly lower than the 60 pc or more ratio in countries like the USA and UK. Ashish Agrawal, who is a Partner in the EQT Private Capital Asia advisory team, expressed his excitement about the addition of Indostar Home Finance to their investment in the education finance sector with HDFC Credila last year.