TVS Credit, Baring EQT, Kedaara Capital in race to acquire Indostar Home Finance

TVS Credit, Baring EQT, Kedaara Capital in race to acquire Indostar Home Finance

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

The non-banking finance arm of South Indian automaker TVS Motor, namely TVS Credit Services Limited, Baring EQT and Kedaara Capital are among the three shortlisted bidders to acquire 100 percent controlling stake in Indostar Home Finance. Indostar Home Finance is currently a 100 percent subsidiary of Indostar Capital Finance, a lender primarily focused in vehicle financing.

According to people aware of the matter, bids from the three interested investors have been received and a final decision is likely to be made soon.

For Indostar Capital, this is the second attempt to divest its stake in its housing finance arm. In May last year, the vehicle financier was in talks with JM Financial for selling its housing finance arm. However, the deal did not go through for want of regulatory clearances and the process was halted.

Indostar Capital is said to have restarted the sale process for its housing finance business around April this year and talks have reached a finality, as per the people cited.

The people aware of the matter said Indostar Capital will deploy the proceeds from sale of its housing finance business to boost growth and profitability going forward. “The money will be ploughed back into the holding company, namely Indostar Capital,” said a person aware of the matter.

Emails sent to Indostar Capital remained unanswered till the time of publishing. TVS Credit, Baring EQT and Kedaara Capital could not be reached immediately for comments.

Indostar Capital is backed by Canadian PE major, Brookfield which took a majority stake in the vehicle financier back in January 2020. Brookfield holds 56.2 percent stake in the company. Everstone Capital, also a co-promoter, continues to 17.09 percent stake in the company. Last year, Everstone sold 14.2 percent stake held in Indostar Capital.

Indostar Home Finance had asset under management of roughly Rs 2,400 crore as on June 30, 2024 and recorded a net profit of Rs 14 crore, up from Rs 8 crore a year-ago. Its net worth stood at roughly Rs 600 crore as on June 30, 2024, as per the company’s investor presentation. While the exact deal value is not known yet, some of the recent transactions in the housing finance space have concluded at 2 - 3 times book value. This translates to Rs 1,800 crore at the upper end of valuations.

Indostar Capital had run into certain issues pertaining to asset quality during Covid, post which the company decided to exit the corporate lending business in 2022. The lender also overhauled its business operations and returned to normalcy by mid-FY23. Indostar Capital posted a consolidated net profit of Rs 25 crore in Q1FY25, with assets under management of Rs 9,565 crore.

In May 2024, TVS Holdings acquired 80 percent stake in Home Credit India for a consideration of Rs 554 crore. If successful, acquisition of Indostar Home Finance would be the second major deal from the TVS stable in less than six months. Baring EQT recently picked up the education lending business of HDFC group, namely HDFC Credila, for about Rs 9,000 crore. About a month back, Kedaara Capital exited its investment in Aavas Financiers, an affordable housing lender, where it sold its stake to CVC Capital.