Money & Banking

Centrum Housing to raise Rs 190 crore from a fund managed by Morgan Stanley

Rajesh Kurup Mumbai | Updated on February 02, 2020 Published on February 02, 2020

Centrum Housing Finance Ltd (CHFL), a part of financial services major Centrum Group, has entered into an agreement to raise Rs 190 crore from a fund managed by Morgan Stanley Private Equity Asia.

The fund will acquire a significant minority stake in the company. The company will use the proceeds to expand operations and enter new geographies, CHFL said in a statement.

The fund managed by Morgan Stanley Private Equity Asia will be the first external institutional investor in CHFL, which is promoted by Centrum Capital Ltd.

EY was the exclusive investment banking advisor to the transaction.

“The Government is taking many steps to boost growth of the affordable housing sector in India. Schemes like the PMAY, reduction in stamp duty and lending rates have given further impetus to the sector,” Jaspal Bindra, Executive Chairman at Centrum Group said.

The companies will focus on Tier II and III cities where they see a big opportunity in low-to-middle income segment.

CHFL, which started operations in 2017, has 36 branches, and is present across 6 states in Central and Western India, serving over 3,500 customers. The company primarily offers financing to individuals for buying and building houses in the affordable housing segment.

It has disbursed loans amounting to over Rs 500 crore and operates across Gujarat, Madhya Pradesh, Rajasthan, Maharashtra, Chhattisgarh, and Delhi.

“This investment will further help us take the company to the next level as we increase penetration across chosen geographies without compromising on credit quality,” Sanjay Shukla, MD and CEO of CHFL said.

According to Arjun Saigal, Co-Head of Morgan Stanley Private Equity Asia in India, “This will be the fourth investment in India’s retail lending space by funds sponsored by Morgan Stanley Private Equity Asia”.

 

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Published on February 02, 2020
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