IndoStar Capital sells home finance arm to EQT for Rs 1,750 crore

EQT acquires IndoStar Home Finance

IndoStar Capital Finance Limited has sold its subsidiary IndoStar Home Finance Private Limited (IHFPL) to Witkopeend BV, an Amsterdam-based affiliate of global private equity investor BPEA EQT Mid-Market Growth Partnership, for Rs 1,750 crore on a fully diluted basis.

The deal, which is pending customary conditions like regulatory approval from the Reserve Bank of India and consent from lenders and shareholders, will see EQT invest Rs 500 crore into IHFPL shortly after the transaction closes. This capital influx is expected to facilitate IndoStar’s accelerated growth in its primary sectors of vehicle finance and small business loans.

Bobby Parikh, chairman of IndoStar, highlighted the strategic importance of this move, emphasising a renewed focus on core business areas. “We are confident that under EQT's stewardship, IndoStar Home Finance will continue to thrive,” he stated.

Shreejit Menon, CEO of IHFPL, expressed enthusiasm for the partnership, noting EQT’s alignment with their mission to provide affordable housing finance solutions across India.

EQT’s Ashish Agrawal noted that retail lending is a critical investment theme for the firm within the Indian financial services sector, pointing to strong demand and favourable government policies in the affordable housing market.

Hemant Sharma, also from EQT, praised IHFPL's established market position and potential for growth, especially in digital transformation and national expansion.

The transaction was facilitated by financial advisors Daiwa Corporate Advisory India and Ambit Private Limited, while Cyril Amarchand Mangaldas provided legal counsel. Ernst & Young LLP conducted financial and tax due diligence, with Samvad Partners also engaged in the process.