TA Associates makes growth investment in Vastu Housing Finance

Private equity firm TA Associates Management LP has made an undisclosed growth investment in Multiples PE-backed Vastu Housing Finance Corp. Ltd, underscoring the rising investor interest in the housing finance sector.

The firms have not disclosed deal size and the post-money valuation.

Mint reported in May that the deal size would likely be about $400 million, with Vastu Housing Finance valued upwards of $1.4 billion. Vastu Housing was valued at about $1.2 billion in February, according to market research firm Tracxn.

Multiples PE, which owns a majority stake in Vastu from an earlier fund, was expected to sell stake in this investment round, the report said.

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In October, the company secured $30 million from Faering Capital, an Indian private equity firm.

The firm's other top backers include Norwest Venture Partners, Creation Investments, and 360 ONE Asset Management.

Founded in 2015, Vastu Housing Finance uses its proprietary technology to offer underwriting and other financial solutions to self-employed customers in semi-urban and rural areas. The company has a presence in 230 branches across 13 cities.

“Vastu has made great progress over the last few years towards its vision of becoming a large, respected and institutional retail lending franchise. We are confident that our association with TA will further accelerate our growth,” said Sandeep Menon, chief executive and founder of Vastu, in a statement on Thursday.

Also Read: PE firm TA Associates lines up a unicorn bet in Vastu Housing Finance

Vastu Housing reported a net profit of ₹285 crore on a revenue of ₹768.5 crore in 2022-23, according to VCCEdge, the data platform owned by HT Media. The company had reported a net profit of ₹181.7 crore on operational revenue of ₹522.6 crore in 2021-22.

Housing finance companies have been in the news over the last few months for mega transactions.

Aadhar Housing Finance went public in May with a ₹3,000-crore initial public offering, while Warburg Pincus picked up a majority stake in Shriram Housing Finance in one of its largest investments in India.

Also Read: Centre may tweak criteria for middle-income groups for urban housing scheme

Aadhar Housing, after a flat listing debut on 15 May, has gained nearly 25% on the National Stock Exchange as of today.