India affordable housing player raises $112m
Indian lower-income mortgage lender Shubham has raised USD 112m led by British International Investment (BII). It facilitates exits for Elevar Equity and Motilal Oswal Private Equity (MOPE).
BII, formerly CDC Group, was joined by impact investor LeapFrog Investments, Asian Development Bank (ADB), and Premji Invest, the family office of Wipro Group chairman Azim Premji. Together, they are investing USD 78m in primary capital. The remainder will go toward secondary positions held by Elevar and MOPE.
US-based Elevar first invested as part of a USD 20m round in 2014 and re-upped in 2018 with a USD 1.6m contribution to a USD 48m round led by Premji Invest. It is exiting its entire stake as part of the latest transaction. MOPE invested USD 10.2m in the 2014 round. It will retain part of its stake.
Premji Invest had a 45% stake as of a solo USD 35m investment in 2017, according to AVCJ Research. The firm is currently investing via a vehicle called PI Opportunities Fund I Scheme II. PI Opportunities Fund I closed on USD 1bn in 2006.
Premji also has exposure to the segment with a USD 157.8m investment in HDFC, India’s largest residential mortgage finance institution, in 2018. That investment was made via PI Opportunities Fund I.
Shubham is one of the fastest-growing companies of its kind with assets under management of more than INR 24.1bn and a presence of 100 branches across nine states as of March. It claims unique underwriting capabilities in the informal economy supported by advanced portfolio monitoring and analytics systems.
This is ADB’s first investment in the affordable housing finance space in India. The development bank said the capital would support operations in the peripheries of urban areas as small as tier-three cities, providing housing loans to lower-income households, as well as housing finance for women.
"Access to quality housing is a critical step in improving sanitation, delivering access to clean water, improving privacy and dignity, and facilitating the creation of family wealth,” Michael Fernandes, a senior partner at LeapFrog, said in a statement.
“LeapFrog is committed to supporting Shubham’s vision to help deliver home ownership to thousands of low-income Indian families for the first time and to enhance their processes through better customer experience and accelerated digitisation of Shubham’s offerings.”
LeapFrog typically makes investments of USD 25m-USD 30m. It has raised more than USD 2bn from global institutional investors, including USD 500m committed last year by Temasek Holdings to support its future funds.
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