Poonawalla Fincorp to sell housing subsidiary to TPG Group for Rs 3,900 crore

Non-banking lender Poonawalla Fincorp on Wednesday announced that it will sell its housing arm Poonawalla Housing Finance Limited to TPG Group for Rs 3,900 crore. The company in its board meeting on Wednesday has approved selling off its housing subsidiary.

"The transaction will maximise the shareholders’ value in the long term as Poonawalla Fincorp aims to build a tech-Led and Digital-First financial services company, with leadership in consumer & MSME financing," said Poonawalla Fincorp in a stock exchange filing.

"The value unlocking of the housing finance subsidiary was one of the stated objectives in the company’s Vision 2025 statement. In line with that, company started the process by looking at part dilution and price discovery," said Poonawalla Fincorp.

Adar Poonawalla, Chairman, Poonawalla Fincorp, said that the financial services business is of strategic importance to the company. "We stay fully committed towards creating value for all our stakeholders and building Poonawalla Fincorp into a new age financial services player of choice. As a global leading investment firm, TPGs experience in building and supporting leading financial services companies will add greater value to Poonawalla Housing," he said.

Abhay Bhutada, Managing Director, Poonawalla Fincorp, said the transaction would further support the company's growth strategy. "We remain committed towards achieving our stated Vision 2025, with our focus on product diversification, innovation and superior customer experience complemented by best- in-class technology and analytics," he mentioned.

Poonawalla Housing Finance, being an RBI-registered housing finance company, is Poonawalla Fincorp's 100% subsidiary. The housing subsidiary had assets under management (AUM) of Rs 5,612 crore as of September 2022. During the second quarter, the subsidiary’s PAT (profit after tax) grew by 75 percent year-on-year to Rs 33 crore.

Earlier Poonawalla Fincorp had announced that it intends to raise growth capital in May 2022 for its housing business.

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