The board of Poonawalla Fincorp Ltd. has approved the sale of its housing subsidiary Poonawalla Housing Finance Ltd. to TPG (Perseus SG Pte. Ltd.), an entity affiliated to TPG Global, LLC, at a valuation of Rs 3,900 crore, subject to regulatory approvals.
“The transaction will maximise the shareholders’ value in the long term as Poonawalla Fincorp focuses on building a tech-led and digital-first financial services company, with leadership in consumer and MSME financing,” Poonawalla Fincorp said.
Poonawalla Fincorp, the non-banking arm of the vaccine major Cyrus Poonawalla Group announced the sale of its housing subsidiary Poonawalla Housing Finance to private equity major TPG for Rs 3,900 crore.
The transaction, subject to regulatory approvals, is being carried out by TPG global arm Perseus SG, the statement said, adding the deal will is part of its effort to maximize shareholder value and to focus on consumer and MSME financing by building a tech-led financial services company.
The complete sale of the housing unit will help the company focus on maximizing value creation by optimising resource allocation and increasing management focus on their respective business needs, the Pune-based company said, adding the proceeds from the sale will strengthen its growth capital.
By focusing on tech-led growth, the company has set a target of achieving a loan book growth of 35-40 percent annually over the next three years and also maintaining net NPAs under 1 percent.
The financial services business is of strategic importance to us, and we stay fully committed to creating value for all our stakeholders and building Poonawalla Fincorp into a new-age financial services player of choice. The company will continue to focus on its growth coming from tech-led businesses and a branch-lite model, said Adar Poonawalla, Chairman of Poonawalla Fincorp.
Abhay Bhutada, Managing Director of Poonawalla Fincorp, said the transaction will further support their growth strategy, given the huge market opportunity. Their focus segments of consumer and MSME financing will continue to have healthy growth and the deal will further accelerate the growth story by way of growth capital.
Poonawalla Fincorp in February 2021 took over Magma Fincorp for Rs 3,456 crore, and is now owned by Rising Sun Holdings, a company owned and controlled by Adar Poonawalla. It has an AUM of Rs 18,560 crore and employs over 4,000 it offers pre-owned car finance, personal loans, loan to professionals, business loans, SME loans, loans against property, supply chain finance, medical equipment, consumer loans, and affordable home loans. As of July-September, 2022-23, the assets under the management of Poonawalla Housing Finance stood at Rs 5,612 crore.
