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Aspire Home Fin in Talks with PEs to Raise Rs 500 cr
The Economic Times  |  April 21, 2017

Shilpy Sinha | Mumbai

ASPIRING BIG Co aims to grow loan book Motilal Oswal mandated to raise funds

 

Motilal Oswal Financial Services' subsidiary Aspire Home Finance is in talks with several private equity firms to raise Rs 500 crore to propel the doubling of its loans at a valuation of about Rs 4,000 crore.

 

“Aspire Home Finance is looking to raise Rs 500 crore from large private equity investors and talks are in an advanced stage,“ said a source in the know of the development. “This will help Aspire to grow its loan book for next two years.“

 

Motilal Oswal has the mandate to raise the funds. Aspire Home Finance declined to comment on this matter.

 

“We are open for capital infusion but we have not yet taken the matter to board,“ said a senior executive of Aspire Home Finance. “We need capital as we are growing our loan book rapidly .“

 

Aspire is a retail home finance company with a loan book of Rs 4,100 crore as of March 31, 2017. The company does not have any exposure to loan against property and developer loans, which are concern areas for HFCs. Its non-performing assets are at 0.3% at the end of the last financial year. “We will look to grow at 50-60% on a year-on-year basis,“ said another company executive.

 

It had reported profit of Rs 53 crore in the first nine months of the last financial year. It has net worth of Rs 650 crore. The company has return on equity of 17%. It is planning to expand to another 40 centres. The company continues to see strong traction across business parametres. Its loan book grew 100% to Rs 4,100 crore in the last fiscal. The average loan size of the book is Rs 9.5 lakh. Motilal Oswal has invested equity of more than Rs 500 crore in the company . Housing finance is getting investor interest after the government's focus on `Housing for All' by 2022 and 39% higher allocations under the Pradhan Mantri Awas Yojana. Some PE investors are even looking for complete buyout. Kedara Capital and Partners, for instance, bought out AU Home Finance last year. The sector is growing at 19-22% every year. In 2015, American fund Carlyle bought a 49% stake in PNB Housing.