Poonawalla Fincorp puts housing finance arm on the block: Sources 

Adar Poonawalla’s Poonawalla Fincorp is in talks to sell its housing finance arm, Poonawalla Housing Finance, sources with direct knowledge of the matter told Moneycontrol.

Sources suggest that the ask price for Poonawalla Housing Finance by the parent company is 3-times the net worth of the arm which was reported as Rs 1,100 crore in Sep-end 2022. Ambit investment bank is running the process to sell Poonawalla Housing Finance and is in talks with select suitors, mostly private equity funds.

Poonawalla Housing Finance’s MD & CEO Manish Jaiswal told Moneycontrol, “We had announced our intent for growth capital raise in May 22 and a merchant banker has been appointed to run this process.”

In its stock exchange intimation on May 12, 2022 the company had said, “The Board has accorded an in-principal approval to raise funds in Poonawalla Housing Finance Limited with raise not exceeding Rs 1,000 crore with stake dilution of less than 15% in one or more tranches by way of preferential issue during the Financial Year 2022- 23.” The company had also shared intent of a possible IPO of the company without alluding to any timelines.

As per the sources, in the absence of any breakthrough in minority stake sale, Poonawalla Fincorp is now exploring a complete sale of its housing arm. An expert said, “The company is in constant need of capital and needs a partner which can provide deep pocket.”

Adar Poonawalla had acquired Magma Fincorp in Feb 2021 which was later named Poonawalla Fincorp. Poonawalla Housing Finance is a 100% subsidiary of the listed company.