TPG, a major global alternative asset management business, said today that it has inked definitive agreements with Poonawalla Fincorp Limited to purchase its subsidiary Poonawalla Housing Finance Limited (PHFL) for INR 39 billion in pre-money equity. The deal is subject to regulatory clearances and other normal conditions and will be invested through TPG Capital Asia, the firm’s Asia-focused private equity vehicle. TPG would also inject up to INR 10 billion in additional equity capital to promote expansion in the short term.
With 153 branches spread across 20 states, PHFL is a significant pan-India player in the affordable housing finance industry. As of 09/22, PHFL’s AUM of more than INR 56 billion was made up of affordable house loans (64 per cent) and loans against property (36 per cent), with an average ticket size of INR 1 million to self-employed and salaried borrowers.
TPG is supporting the current management team, which is led by Manish Jaiswal, Managing Director and Chief Executive Officer, and has previously worked at some of India’s major international and private banks, NBFCs, and credit rating agencies. TPG anticipates a strong cooperation with the existing management team, building on their particular expertise gained over many years of experience.
“As India’s leading affordable housing finance provider, PHFL is uniquely positioned to grow in the fast-expanding affordable housing sector, which we believe is one of the most resilient asset classes across interest rate cycles,” Puneet Bhatia, Co-Managing Partner of TPG Capital Asia, said. “Driven by tailwinds provided by the government’s various initiatives such as the Pradhan Mantri Awas Yojana, National Housing Bank’s affordable refinancing program, reduction in risk weights for housing loans, and increased regulatory compliance, a growing PHFL is expected to serve an even larger population to fulfil their aspiration of owning a house. PHFL has a deeply experienced management team, and we are excited to partner with them in its next growth phase.”
TPG Capital Asia’s current portfolio of fast-growing financial services companies in Asia, including Five Star Business Finance, Du Xiaoman Financial, Kakao Bank, and Singlife, now includes PHFL. TPG Capital Asia has a varied team of more than 90 investment and operating specialists spread across Australia, China, Korea, India, and Southeast Asia, providing local expertise and regional connectivity.
Adar Poonawalla, Chairman of Poonawalla Group, said, “Since its inception, PHFL has played an important role in empowering lives of tens of thousands of Indians by being a trusted partner of every homeowner it serves. We have full confidence that it will continue to make a strong contribution to the affordable housing sector with our new partnership with TPG. As a global leading investment firm, TPG’s experience in building and supporting leading financial services companies will add greater value to PHFL.”
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Manish Jaiswal, Managing Director & CEO at PHFL, said: “PHFL stands for providing dignity of living through home ownership to borrowers across India. PHFL’s customer base has grown ~4x in the last 4 years given the low mortgage debt penetration, young demographics, family nuclearization and national mission of ‘Housing for All’. We are excited to partner with TPG to build a robust and eminent affordable housing financing institution in the country.”
On this transaction, Ambit Pvt. Ltd served as the only financial advisor to Poonawalla Group.
