Canada’s largest mortgage insurance provider, Sagen MI Canada has made an entry into India by signing a definitive agreement to invest for 31% stake in the India Mortgage Guarantee Corp (IMGC).
Sagen (erstwhile Genworth Canada) did not disclose the investment amount.
IMGC will use the fresh capital to expand its business and boost its operational and technological capabilities, the statement said.
“We look forward to supporting IMGC’s growth as they continue to help first-time homebuyers achieve their dream of homeownership," said Stuart Levings, president and CEO of Sagen.
Sagen - owned by a group entity of Canadian Alternative Investment Management Company and Brookfield Asset Management Inc - will become the second largest shareholder after Genworth, post this transaction. Sagen has been operating in Canada for more than 27 years.
IMGC was set up in 2008 as India's first mortgage guarantee fund. Since then, it has received investments from National Housing Bank, International Finance Corp (IFC), Asian Development Bank and Enact Holdings, Inc. (through its subsidiary).
"This investment is a strong endorsement of the quality of businesses we have built to scale over the years. We look forward to leverage Sagen’s global experience to drive innovation and transformation to further deepen the mortgage guarantee market in India," said Mahesh Misra, CEO of IMGC.
The statement said that IMGC has guaranteed over 70,000 home loans amounting to more than Rs 15,000 crore, through its partnership with 19 lenders. Its new business volume increased by over 50% in the last fiscal ended March 31, 2022. It is expected to have a sustained compound annual growth rate (CAGR) of more than 50% in the next three years.
Bengaluru-based Unitus Capital acted as exclusive financial transaction adviser to IMGC.
The Sagen investment in IMGC comes at a time of significant investor interest in the affordable housing segment in India. Earlier in January, HDFC Capital Advisors Ltd, a subsidiary of HDFC Ltd, achieved the initial close at $1.88 billion for its third fund focused on affordable housing.
Late last year, Vastu Housing Finance Corporation Ltd raised $200 million in a financing round from a consortium led by Norwest Venture Partners, Creation Investments, and IIFL Asset Management.
