A retail-focused housing finance firm –Centrum Housing Finance Ltd (CHFL) has raised INR 190 crore from an equity fund managed by Morgan Stanley. CHFL caters to middle-class India and provides financial inclusion to lower and middle income (LMI) families and is controlled by Jaspal Bindra –formed Standard Charter banker.
The investment made by Morgan Stalely Private Equity Asia managed fund is the first external institutional investment in CHFL. Part of Centrum Capital Limited group, CHFL started its operations in 2017. At present, it has 36 branches and is present in Central and Western India across six states –Delhi, Gujarat, Rajasthan, Madhya Pradesh, Maharashtra and Chhattisgarh and is serving over 3,500 customers.
Commenting on the development, Executive Chairman of Centrum Group, Jaspal Bindra, Said, “The Government is taking many steps to boost growth of the affordable housing sector in India. Schemes like the PMAY, reduction in stamp duty and lending rates have given further impetus to the sector. We are excited at partnering with Morgan Stanley and together we will work to grow the business nationally as there is a big opportunity in the low to middle income segment in tier 2 & 3 cities. We will continue to focus and grow in these segments.”
Co-Head of Morgan Stanley Private Equity Asia in India, Arjun Saigal, said, “The affordable housing space in India is underpenetrated and offers tremendous opportunity for growth. We believe that CHFL is well-placed in this segment given its strong retail focus, robust underwriting and collection mechanism, and disciplined ALM management.”
This is the fourth investment made by Morgan Stanley Private Equity Asia in India in the nation’s lending space. Before the CHFL investment, the firm closed an investment at $366 million for its fifth Asia fund. Other than real estate, the $2 billion investment fund will look to make minority investments in industries such as health care, financial services, consumer products, telecom and technology.