Page 14 - Banking Finance July 2019

HOUSING

Blackstone acquires Aadhar Housing Finance
Bajaj Housing Finance
Global investment firm Blackstone has acquired a majority stake in Aadhar
Limited listed to provide
Housing, which deals in the housing financing sectors
PMAY benefits for low-income households, a statement said.
Blackstone has recently announced through a release
that private equity funds managed by it have acquired
a 97.7% stake in Aadhar Housing Finance Ltd, includ-
ing the entire stake held by existing controlling share-
holders, Wadhawan Global Capital Limited (WGC) and Dewan Housing Finance
Limited.
Rs 800 crore primary equity capital has also been infused by Blackstone into
Aadhar to fund the company for its future growth. Aadhar, which has business
interests across 20 states and union territories, has asset under management
Bajaj Housing Finance Limited has
(AUM) of Rs 10,000 crore (USD 1.4 billion), and has average loan ticket size of
been registered as PLI to provide
less than Rs 10 lakh (less than USD 14,000).
PMAY subsidy as per the norms. A
100% subsidiary of Bajaj Finance, one "Our primary capital infusion of Rs 8,000 million has approximately doubled the
of the leading NBFCs in the country, company's net worth and reduced its debt to equity ratio by roughly half. We ex-
BHFL has extended the benefits of pect the rating agencies and company's lenders to welcome the ownership transi-
this PMAY scheme to 1,600+ custom- tion to a long term, well capitalized and patient investor in Blackstone," said Amit
ers, providing them with timely CLSS Dixit, Head of India Private Equity and Senior Managing Director at Blackstone.
benefits.
Housing finance growth decline to 15% likely
BHFL serves 200 to 250 customers ap-
The growth in the housing finance sector is likely to slow down to 13-15% this
proximately on a monthly basis under
fiscal due to the lingering liquidity issues faced by
PMAY. As a beneficiary of PMAY via
non-banking lenders, a report said. As a result of
BHFL, customers cannot only enjoy a
the slow-down, an adverse impact can be there
significant credit subsidy, but can also
over the outstanding housing credit, which stood
make use of a string of benefits that
at Rs 19.1 trillion as of March 2019, as published
come with the loan sanction.
by a report by rating agency ICRA. In order to push
Apart from financing at a competitive
the sagging economic growth, the government is betting on housing sector as
interest rate, customers get access to
one of the major vehicles. “Given the tough operating environment, we expect
a higher tenure spanning for repay-
housing credit growth in FY20 to be in the range of 13-15% which is lower than
ment. Besides, value-added services
the last three years when it clipped past 17%,” it said in a note.
such as a top-up loan, Flexi dropline
It said that since the September 2018, the issues with the non-banking lenders
facility, minimal eligibility and docu-
have observed a slew of companies like DHFL and Reliance Capital suffering and
mentation requirements, and online
a decline in credit growth of dedicated housing finance companies to 10% in
application and loan management
FY19. The growth of banks was faster at 19% as against 13%, increasing their
make every aspect of the process ben-
overall market share to 64% from 62 in the year-ago period, it added.
eficial and convenient for customers.
However, the agency expects growth to recover soon, given the under-pen-
By utilising the many benefits of PMAY
etration of mortgages. There could be some pressure on the asset quality ow-
CLSS through Bajaj Housing Finance
ing to the challenging operating environment and the emerging risk factors, it
Limited, more Indians are sure to be
warned. The overall NPAs of HFCs will grow to up to 1.8% due to troubles faced
able to realise their dream of owning
by some developers, it said. Unlike most previous financial years, when NPAs
a home, whether it is to offer their
decline in the last quarter through enhanced recovery efforts, gross NPAs in-
family security, or invest in an asset
creased to 1.5% as on March 2019 (against 1.4% in December 2018) from 1.1%
that appreciates over the years.
as of March 2018.
14 | 2019 | JULY | BANKING FINANCE