Private equity firm Creador has picked up 9.9 per cent stake in Repco Home Finance Ltd for $13.7 million (around Rs 72.4 crore). Repco Home Finance is promoted by Chennai-based Repco Bank, a government-owned bank which was founded in 1969.
The housing finance industry in India will continue to see strong growth given the favourable demographics, low penetration, and with housing viewed as a stable asset class.
According to Crisil estimates, the housing finance industry grew at a compounded annual growth rate (CAGR) of 17.5 per cent during 2007-2011, with outstanding loans of 6.6 lakh croreas of 2011, says a press release from Creador.
RHFL provides home loans for both salaried and non-salaried persons. It has built a strong presence in South India and has started expanding to other States, with an eye on non-metro locations. It has 74 branches across eight States and one Union Territory.
The company had a loan portfolio of over Rs 3,100 crore as of September 2012. This had grown at a CAGR of 41 per cent between March 2008 and September 2012. For the half-year ended September 2012, the company posted a net profit of Rs 35.6 crore.
RHFL is Creador’s fifth investment globally and second in India. Creador’s maiden investment was in Cholamandalam Investment and Finance Company Ltd, a non-banking finance company headquartered in Chennai and part of the Murugappa group.