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Blackstone pips Baring, Hero Fincorp to buy Aadhar Housing Finance for Rs 2,700 crore

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Private equity firm Blackstone today bought Aadhar Housing Finance, affordable housing arm of Wadhawan Global for about Rs 2,700 crore, outbidding private-equity fund Baring Private Equity and Hero Fincorp.

“Blackstone emerged as the winner for the affordable housing finance arm of Wadhawan’s Dewan Housing bidding the business at Rs 2,700 crore, which is three times the book,” said a source close to the development.

The company was looking at this deal to free up capital and use the fund to ease liquidity pressure on Dewan Housing Finance.

DHFL shares plunged 17.96% on Friday.

The shares of DHFL has been under pressure after a news portal alleged that the company had diverted loans worth Rs 31,000 crore.

The stock came under further pressure after reports about ministry of corporate affairs initiating probe on the allegations emerged.

However, the company has denied receiving any letter from MCA initiating investigation, it has said that the allegations are made with mala fide intent to cause damage to the goodwill and reputation of the company.

“The board of DHFL considered and accorded approval to disinvest to BCP Topco VII, which is managed by private equity fund managed by Blackstone its entire shareholding held in Aadhar Housing Finance,” said DHFL in a statement.

Wadhawan Global Capital, the holding company of DHFL owns 70%, International Finance Corp, the investment arm of World Bank around 17%, DHFL 9% and other minority shareholders hold the remaining 3-4%. Set up in 2011 after the merger of DHFL Vysya and Aadhar Housing Finance, Aadhar has operations in 13 states, including Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Orissa, Jharkhand and Bihar. It provides loans to borrowers with incomes between Rs 60,000 and Rs 6 lakh a year.

The average ticket size is about Rs 8 lakh.

The company reported assets under management of Rs 7,966 crore as on March 31, 2018. In FY18, Aadhar Housing Finance saw a 52% jump in net profit to Rs 99.72 crore from Rs 63.98 crore a year ago. ICRA assigned an A1+ rating to the company’s Rs 1,200-crore commercial paper in May. This is the second deal in the affordable housing space this year.

In January, HDFC had sold its affordable housing subsidiary to Bandhan Bank.

The potential conflict of interest with HDFC’s increasing focus in affordable housing segment was addressed by the deal.

“Conflict of interest was one of the coincidental benefits that we get that by virtue of merging with Bandhan, Bandhan Bank will be able to carry on the full platform of affordable housing loans,” Keki Mistry had said post merger of Gruh with Bandhan.




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