Warburg Pincus to invest $95m in India's Home First Finance
Warburg Pincus has agreed to invest INR7 billion ($95.7 million) in Home First Finance, an India-based provider of home loans to the low and middle-income segments.
The private equity firm is committing primary capital and acquiring shares held by existing investors. While Home First said that True North and Bessemer Venture Partners will retain interests in the company, it did not specify whether they would be making partial exits. As of March, True North owned a 45.97% stake while Bessemer held 16.28%.
According to AVCJ Research’s records, Bessemer backed Home First Finance in 2011, with Tata Capital investing two years later. In 2017, True North committed $100 million, acquiring a combination of primary and secondary shares. This facilitated an exit for Tata Capital.
The company filed for an IPO last November, outlining plans to raise INR4 billion in new equity. Existing investors, including True North and Bessemer, intended to offload INR11 billion in shares. The offering received regulatory approval in March.
Founded in 2010, Home First has a presence in 60 districts across 11 states and one union territory, although it is most active in the urbanized regions of Gujarat, Maharashtra, Karnataka, and Tamil Nadu. The company issued loans to more than 50,000 customers over the past 10 years. These are typically owners or employees of small and medium-sized enterprises (SMEs). They often struggle to obtain financing through traditional channels.
The company targets first-time homebuyers, using proprietary machine learning and customer scoring models for speedy underwriting. As of March, it had INR36.2 billion in assets under management, up from INR24.4 billion a year earlier. Over the same period, net profit increased from INR46 million to INR80 million.
“Home First has had a remarkable journey to become a leading affordable housing finance company in a relatively short span of 10 years. It is helmed by a very talented team and robust operating processes that continue to steer the company to do well through the pandemic and to leverage the growth potential of the affordable segment,” Narendra Ostawal, a managing director at Warburg Pincus, said in a statement.
Other private equity-backed affordable housing specialists in India include Aadhar Housing Finance, which was acquired by The Blackstone Group for INR27 billion last year. Meanwhile, Morgan Stanley Private Equity Asia has two portfolio companies in the space: Centrum Housing Finance and Ummeed.
More on South Asia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.