Ummeed Housing Finance Pvt. Ltd has raised ₹164 crore in a Series D equity round led by a fund managed by Morgan Stanley Private Equity Asia.
Existing investor LGT Lightstone Aspada, the India-focused impact investment platform of LGT Lightstone, which had invested $10 million in Ummeed in 2018, also participated in the new round. Avendus Capital acted as the exclusive financial adviser to Ummeed on the transaction.
Ummeed, the Gurugram-based affordable housing financier, started out in 2016. It caters to the informal and low-income segment predominantly in Tier II and Tier III towns and operates in Rajasthan, Haryana, Delhi-NCR, and Uttar Pradesh. It offers ₹3 lakh to ₹50 lakh loans for home purchases, home construction, home renovation, loan against property, and business loans. “This round of fund-raising gives us clear visibility on the equity front before entering the next financial year. We will use these proceeds to expand in new geographies and continue to strengthen our technology platform, with a focus on building strong underwriting practices. We are moving into the growth stage," said Ashutosh Sharma, founder and managing director, Ummeed Housing Finance. The company aims to double its assets under management (AUM) from ₹500 crore to ₹1,000 crore over the next 12-18 months.
“Affordable housing finance presents a large untapped opportunity that Ummeed intends to address through its scalable operating model built with the right blend of technology, people and processes. We are excited to partner with UHFL in its next phase of growth," said Nirav Mehta, managing director of Morgan Stanley Private Equity Asia.
Housing finance companies and non-banking financial companies have been grappling with a liquidity crisis, downgrades, and defaults for more than a year now.
“The housing finance sector in India has seen a liquidity crunch for most of this financial year, with stress in a couple of large housing finance companies. Fund raising from a credible private equity investor in the current environment signifies the trust the fund has shown in the growth story and the robust business model of the company," Sharma said.