NHB to buy stake in Mahindra Finance co

NHB to buy stake in Mahindra Finance co
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First Published: Wed, Aug 13 2008. 12 17 AM IST
Updated: Wed, Aug 13 2008. 12 17 AM IST
New Delhi: India’s housing finance regulator, National Housing Bank (NHB), will pick up 12.5% stake in Mahindra Rural Housing Finance Ltd, a wholly owned subsidiary of non-banking financial services firm Mahindra and Mahindra Financial Services Ltd (MMFSL), for an undisclosed sum.
NHB would also help the home loan firm raise funds in the next two years and would eventually get 12.5% stake of the capital raised, said Uday Phadke, vice-chairman of MMFSL. NHB has so far invested Rs5.80 crore in Mahindra Rural Housing for its stake. This figure could go up depending on the capital raised.
The capital base of Mahindra Rural is expected to be Rs100 crore in the next three-four years, said MMFSL’s managing director Ramesh Iyer.
“Around 20 years back, we had developed a programme of taking equity stake in housing finance companies to promote home finance in rural areas,” said S. Sridhar, chairman and MD of NHB. “We want to repeat this with rural housing finance companies.”
In most housing finance firms, NHB has disinvested its stake at an attractive return of more than 15%. It is looking at one more such proposal to acquire stake in a rural housing finance firm, Sridhar said, without disclosing the name. The home loan firm will primarily address customers in rural and semi-urban areas.
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First Published: Wed, Aug 13 2008. 12 17 AM IST