‘Housing finance arm sale will help focus on Fincorp’


Mumbai: Adar Poonawalla, chairman of the Poonawalla Group, said the group’s non-bank lender will now focus on its non-bank Poonawalla Fincorp Ltd after it sold its home financing arm to TPG Global for 3,900 crore.

“This will allow us to focus on our main NBFC business, which requires capital in the future,” he said, adding that the company aspires to achieve annual growth of 35-40% in assets under management over the next three years.

In May, Poonawalla Fincorp said it was looking to raise capital to fuel growth. In filings, the company said its board had given in-principle approval to raise funds in unit Poonawalla Housing Finance Ltd. The initial plan was to raise funds of not more than 1,000 crore with a stake dilution of less than 15% during FY23. It had also said it might look at a possible IPO of the housing finance arm.

“Earlier, we were raising capital of 15–20% stake. When we received this offer, the board convened and was in consensus that it was a very good, fair valuation which increases the Poonawalla Fincorp net worth and is in the interest of all the stakeholders and shareholders,” he added.

Poonawalla declined to share further details on the utilization of the proceeds, saying the deal is still ongoing and awaits the final regulatory approval and conclusion.

The Cyrus Poonawalla group acquired Magma Fincorp in 2021 and renamed it Poonawalla Fincorp. The housing finance subsidiary operates in the affordable housing market. As of 31 March, its business comprised over 46,000 customers, and the average ticket size was 11 lakh.

“With the rapidly growing digital ecosystem, Poonawalla Fincorp sees tremendous growth opportunities in its current and proposed line of businesses. It will continue to build a strong retail franchise in consumer and MSME financing,” the statement issued by the company on Wednesday said.

The company, along with its subsidiaries, has assets under management of 18,560 crore and employs more than 4,000 people. Its financial services offerings include pre-owned car finance, personal loans, loans to professionals, business loans, loans to small and medium enterprises, loans against property, supply chain finance, medical equipment finance, consumer loans and affordable home loans.

“Financial services business is of strategic importance to us, and we stay fully committed to creating value for all our stakeholders and building Poonawalla Fincorp into a new-age financial services player of choice,” Poonawalla added.

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