TPG buys India's Poonawalla Housing Finance

Poonawalla Housing is being carved out from its parent company Poonawalla Fincorp, a non-banking financing company (NBFC) focused on rural areas known as Magma Fincorp until a rebrand mid-last year. Magma has received funding from KKR, Leapfrog Investments, ChrysCapital Partners, India Value Fund Advisors, and the International Finance Corporation.

With 153 branches across 20 states and around INR 56bn in assets under management, Poonawalla Housing claims to be India’s largest national-scale affordable housing provider. The business is currently split 64% in home loans and 36% in loans against property.

The customer base – typically self-employed and salaried borrowers – is said to have grown 4x in the past four years on the back of trends related to low mortgage debt penetration, young demographics, family nuclearization, and Housing for All. The latter is a government initiative that targets urban poor including slum dwellers. Poonawalla Housing's average ticket size is less than INR 1m.

TPG is backing the existing management team led by CEO Manish Jaiswal, who has worked at various foreign and private banks, NBFCs and credit rating agencies in India. Puneet Bhatia, co-managing partner of TPG Capital Asia, described the management team as “deeply experienced.”

TPG has substantial financial services portfolio in the region, including Du Xiaoman Financial, a financial technology player that spun out from China’s Baidu, Korea’s mobile-only Kakao Bank, and Singaporean insurance provider Singlife. Indian exposure includes Five Star Business Finance, an NBFC that raised a INR 15.9bn IPO last month.

“Driven by tailwinds provided by the government’s various initiatives such as the Pradhan Mantri Awas Yojana, National Housing Bank’s affordable refinancing program, reduction in risk weights for housing loans, and increased regulatory compliance, a growing [Poonawalla Housing] is expected to serve an even larger population to fulfil their aspiration of owning a house,” Bhatia said in a statement.

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• Topics
• South Asia
• Financials
• Buyouts
• India
• TPG Capital
• Financial Services
• NBFCs