India's IndoStar Capital jumps on $209 mln deal to sell home finance unit to EQT

Bajaj Housing Finance

20/09/2024 06:09

BENGALURU, Sept 20 (Reuters) - Shares of IndoStar
Capital Finance  INAC.NS  climbed to an over three-year high on
Friday, a day after the Indian non-bank lender announced a $209
million deal to sell its home finance unit to private equity
firm EQT.
    The deal will allow IndoStar to focus on its core businesses
of vehicle finance and small business loans, the company said in
an exchange filing late on Thursday.
    Once the deal closes, EQT plans to invest 5 billion rupees
($59.84 million) in the affordable housing loan provider,
IndoStar Home Finance.  
    The private equity firm has been amping up its financial
services portfolio in India, having bought a stake in education
finance firm HDFC Credila last year.
    Demand for affordable housing is lagging a boom seen in
luxury housing in India, but lenders are banking on government
support to tap the largely penetrated market.
    Bajaj Housing Finance  BAJO.NS , a lender primarily focused
on luxury home finance which went public this month, entered the
affordable segment earlier this year, while Godrej Capital is
reported to be targeting the segment.
    IndoStar Capital shares jumped 14% to their highest since
Aug. 2021, before trimming some gains to last trade up 4.8%.
    
($1 = 83.5500 Indian rupees)

 (Reporting by Chris Thomas in Bengaluru; Editing by Nivedita
Bhattacharjee)
 ((chris.thomas@thomsonreuters.com;))