IndoStar Capital Finance Limited (IndoStar) today announced that its Board has approved the sale of its subsidiary, IndoStar Home Finance Private Limited (IHFPL) to WITKOPEEND B.V., an affiliate of BPEA EQT Mid-Market Growth Partnership (“EQT”), a global private equity investor, for INR 1,750 crore on a fully diluted basis.
The transaction is subject to customary conditions precedent, including receipt of RBI approval, consents from lenders and shareholders’ approval. Further, EQT plans to invest INR 500 crore into IHFPL upon or shortly after closing of this transaction, and the board of IHFPL has granted an in-principle approval for such infusion.
The transaction will provide IndoStar with capital for accelerated growth and value creation in its core verticals of Vehicle Finance and Small Business Loans.
Commenting on this strategic transaction, Bobby Parikh, Chairman of IndoStar, said, “This transaction represents an important strategic move for IndoStar as we focus on driving accelerated growth and value creation in our core verticals including Vehicle Finance and Small Business Loans. We are confident that under EQT's stewardship, IndoStar Home Finance will continue to thrive and deliver value to its stakeholders.”
Shreejit Menon, CEO of IndoStar Home Finance, added: "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. We extend our thanks to IndoStar and its promoters for their unwavering support and commitment throughout the years."
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.”
Daiwa Corporate Advisory India Private Limited and Ambit Private Limited acted as exclusive financial advisors to Indostar Capital Finance Limited and Indostar Home Finance Private Limited in relation to the transaction. Cyril Amarchand Mangaldas was engaged as the legal counsel to Indostar Capital Finance Limited and Indostar Home Finance Private Limited in relation to the transaction. Ernst & Young LLP was engaged by Indostar Home Finance Private Limited for the vendor financial and tax due diligence exercise in relation to the Transaction. Samvad Partners was also engaged by Indostar Home Finance Private Limited as part of the transaction.