Centrum Housing Finance Ltd, an affordable housing finance company, announced that a fund managed by Morgan Stanley Private Equity Asia will invest ₹190 crore to acquire a significant minority stake in the company. The investment is seen as first such external institutional funding in the Mumbai-based lender promoted by Centrum Capital Ltd.
As per the exchange filings, Centrum Housing said that the funds will be utilised to expand its operations and enter new geographies.
Sanjay Shukla, MD and Chief Executive, Centrum Housing, said, “The fact that we have been able to attract investment from a fund of the calibre of Morgan Stanley Private Equity Asia at this early growth stage of the company, is a testament to the strength of the company’s business model and a source of great pride for all of us.” He added, “This investment will further help us take the company to the next level as we increase penetration across chosen geographies without compromising on credit quality.”
Founded in 2017, Centrum Housing is a retail-focused housing finance firm with 36 branches across Gujarat, Madhya Pradesh, Rajasthan, Maharashtra, Chhattisgarh and Delhi, and over 3,500 customers. Till now, the company has disbursed loans worth ₹500 crore, focusing on the affordable housing segment. It offers various other loan products, including self-construction loans, top-up loans and loans against residential property. As per its 2018-19 annual report, Centrum revenue stood at Rs39.32 cr, while its profit stood at Rs1.43 cr.
Arjun Saigal, co-Head, Morgan Stanley’s Asia PE Asia, said, “The affordable housing space in India is underpenetrated and offers tremendous opportunity for growth. We believe that CHFL (Centrum Housing) is well-placed in this segment given its strong retail focus, robust underwriting and collection mechanism, and disciplined ALM (asset-liability management). This will be the fourth investment in India’s retail lending space by funds sponsored by Morgan Stanley Private Equity Asia.”
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