Private equity firm Warburg Pincus is contemplating selling some more stake in its portfolio firm Home First Finance Company, in which it had initially invested in 2020 and currently holds close to 23 per cent stake, sources said. The stake divestment will be through block trades, they added.

Last year, in November, it sold 3.3 per cent stake of Home First, through its subsidiary Orange Clove Investments BV, for around ₹251 crore. Sources said that it may look at a higher stake sale, though discussions with bankers are still preliminary.

Warburg Pincus did not respond to an e-mail request for a comment on the proposed transaction.

The private equity firm initially invested ₹700 crore in Home First in October 2020, through a combination of primary fund-raise and secondary sales. It did not mention how much stake it had, but an exchange filing by the housing finance company, at the end of January 2021, showed that Orange Clove Investments held a stake of 28.8 per cent, valuing the company at over ₹2,400 crore. By the end of September 2023, that stake had fallen to 26.4 per cent.

Warburg’s current stake of 22.97 per cent is worth over ₹2,100 crore. Shares of Home First have risen over 17 per cent from April this year, while the stock hit a 52-week high of ₹1,195 on July 1.

Monetising holding

Private equity firms have been taking advantage of the rally in the markets in the last couple of years to monetise their holdings in portfolio companies, in which they invested around four-seven years ago. In case of listed companies, they have taken the block deal route to offload shares.

In the first three months of FY25, sell-downs via block deals of over ₹1.3-lakh crore were seen, up 76 per cent on year.