Mumbai: Private equity firm Creador has bought a 9.9% stake for about Rs.73 crore ($13.7 million) in Repco Home Finance Ltd (RHFL), a housing finance company promoted by state-controlled Repatriates Co-operative Finance and Development Bank Ltd (Repco Bank Ltd).
Chennai-based RHFL, founded in 2000, focuses on non-metro locations and has 74 branches across eight states and one union territory in the country. The company has loan portfolio of over $588 million as of September 2012, Creador said in a statement. This loan portfolio has grown at compounded annual growth rate of 41% between March 2008 and September 2012. For the half-year ended September 2012, the company posted a profit of Rs.35.6 crore.
In a statement, Creador said that the housing finance industry in India will continue to see strong growth given the favourable demographics, low penetration and housing as stable asset class in India.
The housing finance industry has grown at an annual average growth rate of 17.5% during 2007-2011 with outstanding loans of Rs.6.64 trillion ($148 billion) as of 2011, according to Crisil estimates.
“We are impressed with the company’s unique proposition in providing mortgages to an under-served market as well as the quality and track record of the management team,” said Anand Narayan, senior managing director of Creador Advisors India.
RHFL is Creador’s fifth investment and second transaction in India. Creador’s maiden investment was in Cholamandalam Investment and Finance Co. Ltd, a non-finance banking company headquartered in Chennai. Recently, Creador announced the acquisition of an Indonesian branded foods business, PT Simba Indosnack Makmur from Godrej Consumer Products Ltd.