The Centrum Group is likely to finalise the sale of its housing finance subsidiary by the end of this fiscal, with the odds evenly distributed between the possibility of a 100% sale and part monetisation. The group is in talks with five-six investors and the discussions have now boiled down to the valuation of the company, people aware of the matter said.
Centrum is looking for a valuation of around Rs 1,300 crore for the housing finance subsidiary, which is a little below the current market cap of Centrum Capital, the operating holding company of the group. "The group is negotiating with several investors and the discussions are now progressing to the final due diligence and valuation of the company," Centrum group executive chairman Jaspal Bindra told.
Centrum Housing Finance has a net worth of Rs 450 crore and assets under management of Rs 1500 crore. "The investors' interest is ranging from a full acquisition of Centrum Housing Finance, to a majority or minority stake sale as well. We are exploring all the possibilities but at the end of the day, the decision will depend upon the valuation and counterparty. The deal will be finalized before the end of this financial year. Bindra said. The group with interests ranging from banking to wealth management holds about 60% in the mortgage lending arm while Morgan Stanley has 25% stake.
The balance is held by employees and others. It started scouting for an investor around this time last year and engaged EY for this. Earlier in 2022, the Centrum group transferred all its lending businesses except housing finance business to Unity Small Finance Bank, which is 51% owned by it. The housing business could not be transferred since it is partly owned by Morgan Stanley.
Centrum Housing Finance, which commenced operations in 2017, acquired the business of National Trust Housing Finance (Natrust) in December 2022 to enter the southern market. Centrum group's consolidated revenue stood at Rs 868 crore at the end of September, up 61% over Rs 537 crore seen in the year ago period. Its EBITDA was at Rs 401 crore, up 68% over the same period.
