EQT to acquire Indostar Home Finance, an Indian affordable housing finance company, for INR 17.5 billion (USD 210 million) and invest INR 5 billion to support further growth

STOCKHOLM,Sept. 20,2024 --

Indostar Home Finance is a fast-growing affordable housing finance company with INR 24 billion (USD 286 million) in assets under management,that has supported over 39,000 low income homeowners and small businesses

India's INR 30 trillion housing finance market presents a multi-decade growth story driven by strong government support,rising affordability and urbanization

EQT will invest INR 5 billion in primary capital to support Indostar Home's continued growth,including by broadening its footprint across India and investing in digital capabilities

EQT is pleased to announce that the BPEA Mid-Market Growth Partnership (or "the MMG fund") has agreed to acquire a 100% stake in Indostar Home Finance (or "the Company"),a wholly owned subsidiary of Indostar Capital Finance Limited,for INR 17.5 billion (USD 210 million).

Founded in 2017,Indostar Home Finance provides affordable mortgages to retail customers in tier 2 to tier 4 cities in India and has supported over 39,000 low income homeowners and small businesses. The Company has rapidly scaled to more than INR 24 billion in assets under management,achieving a 32 percent compounded annual growth in the last three years. Indostar Home Finance has a network of more than 130 branches spread across nine states and employs over 1,000 people.

The Indian housing finance market currently stands at more than INR 30 trillion,according to the CRISIL. The segment has recorded strong growth driven by government support,rising affordability,and urbanization. However,there remains a significant shortage of housing in the country,with India's mortgage to GDP ratio at 12.3% compared to more than 60% for developed countries like the USA and UK.

The MMG fund will invest INR 5 billion of primary capital in Indostar Home Finance to support its next phase of growth. EQT aims to expand the Company's geographic footprint and accelerate its digital transformation journey by leveraging EQT's in-house digitalization expertise,network of seasoned industry advisors,and expertise in go-to-market strategies.

Ashish Agrawal,Partner in the EQT Private Capital Asia advisory team,said: "Retail lending is a key investment theme for EQT within financial services in India. Building on our investment in the education finance sector through HDFC Credila last year,we are thrilled to welcome Indostar Home Finance to our portfolio. India's affordable housing finance sector represents a long-term growth opportunity supported by secular demand drivers,favorable government policies and resilient asset quality across economic cycles"

Hemant Sharma,Managing Director in the EQT Private Capital Asia advisory team,said: "Indostar Home Finance has established itself as a leading player in this segment and is well-positioned for continued growth. We are impressed by its market-leading position in South India and strong underwriting capabilities. We see significant potential to expand Indostar's presence across India and drive its digital transformation. EQT looks forward to supporting the company in its next phase of growth."

Mr. Shreejit Menon,CEO of Indostar Home Finance,said: "This transaction marks a key milestone for Indostar Home Finance. We are excited to embark on this new journey with EQT,who shares our vision and whose partnership will significantly help advance our mission of delivering affordable housing finance solutions across India. With EQT's support and global expertise,we are well-positioned for accelerated growth and success."

The transaction is subject to customary regulatory approvals.

Contact

EQT Press Office,[email protected]

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