US-based private equity fund TA Associates, which has been on an exit spree in India for the past few months, has announced Thursday that it has made an undisclosed investment in mortgage lender Vastu Housing Finance Corp Ltd.
VCCircle was the first to report on 26 June that the asset management firm was all set to pick up around 12% stake in Vastu for roughly $150 million. The transaction is likely to have valued the firm at around $1.2 billion.
"We have tracked the company (Vastu) for years and have been impressed by its reach, strong credit underwriting principles and tech-enabled approach. We look forward to our long-term partnership with Vastu in its future journey,” said Dhiraj Poddar, managing director at TA.
TA Associates is likely to have routed the funding through its $16.5 billion global fund. The fund would typically invest a bare minimum of $150 million and the sweet spot would be in the range of $300-500 million for a desirably control oriented transaction, a person tracking the firm had earlier told VCCircle.
The transaction has provided a partial exit to Renuka Ramnath-led Multiples Alternate Asset Management, which holds a majority stake in Vastu Housing Finance.
"Sandeep Menon and Sujay Patil have done an exceptional job in building Vastu into a formidable franchise in the affordable housing finance space. Their vision, coupled with strong execution, has transformed Vastu into a category leader," said Ramnath.
Vastu was founded in 2015 and offers credit mainly to low-income groups. The Mumbai-based company provides affordable housing finance to lower and middle-income segments and loans against properties to micro, small and medium enterprises in India.
Last December, the lender roped in the International Finance Corporation on board as a fresh investor. IFC bought out stake in the firm from Multiples PE, which post the transaction could be holding a little over 67.6% stake in Vastu.
It also counts Faering Capital, Creation Investments and 360One Asset Management among its other investors.
In addition, Vastu has also set up a subsidiary (Vastu Finserve), which focuses on the small business loan and used vehicle finance segments. Vastu has a management team with a pan-India presence across 13 states in the country.
As for TA Associates, the PE fund typically invests in companies operating in technology, healthcare, financial services, consumer and business services sectors. The PE firm invests in India out of its global funds.
TA Associates just like last year has been currently quite active in liquidating some of its investments. For instance, the fund manager had last month completely divested its entire shareholding in another BFSI portfolio.
TA Associates, in another similar move, pressed on the sell button on a seven-year-old portfolio company in February this year. It diluted a part of its stake in Shilpa Medicare Ltd.
Last year, the PE firm struck a large exit deal to sell its entire holding in Indira IVF to EQT via a secondary transaction.
