Mumbai-based ArthVeda Fund Management said Qatar Holding has agreed to invest $250 million (₹1,663 crore) in its affordable low and middle income (LMI) fund.

This comes days after the Union Budget gave the affordable housing category an infrastructure tag to give a fillip to the ‘Housing for all’ by 2022 initiative .

Bikram Sen, CEO, Arthveda, said the subscription of the entire corpus of its FDI-compliant affordable housing fund by Qatar Holding was the first substantial foreign investment into India’s affordable housing segment spanning LMI residences after the Union Budget.

According to ArthVeda, India needs to build 19 million urban housing units in the low and mid-income category by 2022 across Tier 1, 2 and 3 cities, requiring capital of $1 trillion.

AVFM is part of Wadhawan Global Capital, a financial services conglomerate, with Dewan Housing Finance Corp Ltd (DHFL) as the flagship entity.

DHFL has lent over $25 billion to the LMI segment, and overall, DHFL along with its associate housing finance company, Aadhar Housing Finance, lends on average $350 million in a month to home buyers at more than 500 locations in India.

“AVFM’s Affordable Housing Fund leverages our entire group’s leadership in the LMI lending segment and applies that to investments in affordable housing,” said Kapil Wadhawan, CMD, DHFL and ArthVeda.

AVFM’s domestic $17 million Dream Fund, which exited in 2015, gave a gross IRR of 17 per cent (net to investors).

A mid-income $22 million domestic Star Fund I, which is due to exit from its investments in the next couple of months, will give similar returns.

Investments into the AVFM fund were raised in collaboration with the Dubai-based CI Holding Global, founded and run by Omar Farooqui.

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