Poonawalla Fincorp to sell housing arm to TPG Group for Rs 3,900 crore

Poonawalla Housing Finance is an RBI-registered housing finance company and is a 100 percent subsidiary of Poonawalla Fincorp.

Indian non-banking lender Poonawalla Fincorp on December 14 announced that it will sell its housing arm to TPG Group for Rs 3,900 crore.

Poonawalla Fincorp Limited, today in its board meeting approved sale of its housing subsidiary Poonawalla Housing Finance Limited to TPG (Perseus SG Pte. Ltd., an entity affiliated with TPG Global, LLC) at a valuation of INR 3,900 Crores, subject to regulatory approvals.

The transaction will maximize the shareholders’ value in the long term as Poonawalla Fincorp focusses on building a Tech-Led and Digital-First financial services company, with leadership in consumer & MSME financing, the company said in a press release.

Adar Poonawalla, Chairman, Poonawalla Fincorp, said: “Financial services business is of strategic importance to us, and we stay fully committed towards creating value for all our stakeholders and building Poonawalla Fincorp into a new age financial services player of choice. As a global leading investment firm, TPGs experience in building and supporting leading financial services companies will add greater value to Poonawalla Housing.”

Abhay Bhutada, Managing Director, Poonawalla Fincorp, said: “The transaction would further support our growth strategy, given the huge market opportunity and our demonstrated execution excellence. We remain committed towards achieving our stated Vision 2025, with our focus on product diversification, innovation and superior customer experience complemented by best- in-class technology and analytics.”

Poonawalla Housing Finance is an RBI-registered housing finance company and is a 100 percent subsidiary of Poonawalla Fincorp. The housing finance company had assets under management (AUM) of Rs 5,612 crore as of September 2022. The subsidiary’s PAT (profit after tax) grew by 75 percent year-on-year to Rs 33 crore during the second quarter.

Poonawalla Fincorp had earlier announced its intent to raise growth capital in May 2022 for its housing business. The company had also shared the intent of a possible initial public offering without alluding to any timeline.