Centrum Housing Finance Limited (CHFL) has entered into an agreement to raise Rs 190 crore of equity from a fund managed by Morgan Stanley Private Equity Asia.
In a filing in the financial markets, CHFL said, “The investor (Morgan Stanley) will subscribe to 6,66,90,413 equity shares of the face value of Rs 10 each, for an aggregate consideration of about Rs 190 crore.”
CHFL said the funds will enable the company to expand its operations in the country as well as enter into new areas.
The agreement means that Morgan Stanley will now get a minority stake in CHFL.
Centrum Housing, which is a subsidiary of Centrum Group, focuses on providing affordable housing to the middle class.
“The company [CHFL] primarily offers financing to individuals for buying and building houses in the affordable housing segment,” the filing added.
Centrum Housing added that till date it has disbursed loans over Rs 500 crore and has 36 branches across 6 states – Delhi, Maharashtra, Gujarat, Madhya Pradesh, Rajasthan and Chhattisgarh.
CHFL said that the fund managed by Morgan Stanley Private Equity Asia will be the “first external institutional investor” in the company.
CHFL Executive Chairman Jaspal Bindra said together CHFL and Morgan Stanley will work to grow the business nationally. He added that there is a big opportunity in the low to middle-income segment in tier 2 and tier 3 cities.
Arjun Saigal, co-Head of Morgan Stanley Private Equity Asia in India, said that there is tremendous opportunity in the affordable housing space in the country. He further said the latest infusion of funds is the company’s fourth investment in India’s retail lending space.
Morgan Stanley Private Equity Asia manages third party money funds in Asia-Pacific and so far has invested in the region for over two decades. It has offices in Hong Kong, Beijing, Shanghai, Seoul, Bangkok and New York. In India, it has an office in the commercial capital, Mumbai.