Warburg Pincus expands its BFSI basket in India by betting on Home First Finance
Warburg Pincus will invest 700 crore rupees ($ 95.38 million) in Home First Finance Company India Ltd, as the US-based private equity firm continues to invest heavily in the Indian financial services industry.
The PE company’s investment will include a primary capital injection into the affordable home loan provider and a stake purchase from certain existing shareholders, Home First said in a statement.
The mortgage lender did not give a breakdown of the primary and secondary components. He also did not specify the size of the stake that Warburg is buying or who is selling the shares, saying only that Warburg is joining existing shareholders True North and Bessemer Venture Partners.
However, True North likely sold part of its stake in this transaction. The medium-sized Indian PE firm is the promoter of the mortgage lender and owned three-quarters of the company as of November 2019, when it deposit for an initial public offering.
True North had planned to make a partial exit from the IPO, which received regulatory approval in March. Home First did not say whether the IPO was still on track.
The American company Bessemer was Home First’s first institutional investor in 2010, when the company was founded. Tata Capital Growth Fund arrived as a private equity investor three years later.
In 2017, Tata Capital got an exit when True North bet Rs 652 crore (then $ 100 million) to buy a 71.5% stake in Home First. True North subsequently increased its stake to 76.6%. Bessemer owns around 16.2% of Home First, while individual shareholders hold the remaining stake.
Home First is present in 60 districts in 11 states. As of March 31, 2020, its assets under management amounted to Rs.3,618 crore. Gross non-performing assets represented 0.87% of total loans.
Meanwhile, the deal expands Warburg’s portfolio of banking, financial services and insurance companies in India.
PE Company currently has stakes in IDFC First Bank, Fusion Microfinance, IndiaFirst Life Insurance, AU Small Finance Bank, education lender Avanse Financial Services Ltd and SBI General Insurance.
She had previously invested and exited ICICI Lombard General Insurance and Kotak Mahindra Bank, among other financial services companies in India. This too sold part of its stake at the AU’s Small Finance Bank for the fourth time earlier this year.
According to its website, Warburg Pincus has more than $ 53 billion in assets under management. It has an active portfolio of more than 185 companies around the world. It invests in the energy, financial services, health, technology, and industrial and commercial services sectors.