Warburg to Exit its Stake in Home First Finance
Warburg has initiated conversations with banks and NBFCs to exit its stake in Home First Finance. The New York-headquartered private equity major has reached out to IndusInd Bank, Shriram Housing, Vaastu Housing Finance, RBL Bank, and YES Bank for a possible transaction. Home First is among the top five affordable housing lenders with a loan book of ?5,832 crores as on June 30. There’s a lot of interest in acquiring Warburg’s stake but the price quoted now is very steep. While Warburg’s asking rate is 6X price to book, Home First’s shares trade at a little over 4X valuations. Conversations are at an early stage and if valuations become more realistic, we would conclude the transaction by the end of this fiscal. Home First was founded by former Citibank professionals — Jerry Rao, PS Jayakumar, and Manoj Viswanathan — in 2010. While Rao is said to have cashed out of the company, Jayakumar and Viswanathan collectively hold less than 4 percent stake. Viswanath is the MD & CEO of the company. Shares of Home First Finance were listed on bourses in February 2021 and Warburg — which was roped in as a pre-IPO investor — holds a 28.73 percent stake in the company. Warburg’s stake in the company totals ?2,170 crores.
Tags : Warburg banks NBFC Home First Finance New York IndusInd Bank Shriram Housing Vaastu Housing Finance RBL Bank YES Bank