Weaver Services Pvt. Ltd, an affordable housing finance company founded by former employees of HDFC Ltd, is in talks to raise about ₹1,000 crore from Premji Invest and Paragon Partners, three people familiar with the matter said.
“Some of the proceeds will be used to scale up Delhi-based Capital India Home Loans that the company acquired in October,” one of the people cited above said on the condition of anonymity.
While Paragon and Weaver did not respond, Premji Invest declined to comment.
Weaver, set up by Satrajit Bhattacharya, former head of investments and M&A at HDFC, and other former HDFC executives, said in October that it had signed an agreement to raise ₹800 crore from Gaja Capital and Lok Capital. The deal has not yet secured regulatory approval.
Part of the funds from that capital raise has been earmarked towards an acquisition of Capital India Home Loans for ₹267 crore, a deal that is also awaiting regulatory clearance.
Over the last few years, housing finance companies, especially those operating in the affordable segment, have attracted increased interest from investors who perceive them as less risky assets.
The affordable segment typically caters to the underserved category of low-income or mid-income customers who may be salaried, work in the informal sector, or are self-employed and run a small business.
While private equity players have been active in this space, venture capital firms have begun to realize the sector’s potential owing to its promising growth prospects. Earlier this month, Prosus, which typically invests in tech startups, made its first $100 million investment in Vastu Housing Finance.
In 2024, housing finance companies saw a tenfold increase in primary fundraising to $826.8 million compared to $82.6 million, as per data from Tracxn.
Meanwhile, Weaver will focus on launching innovative home loan products for women borrowers and self-employed individuals in the unorganised sector from the Tier 2 and Tier 3 towns.
Capital India Home Loans is a subsidiary of Capital India Finance Ltd (CIFL), a non-deposit taking non-banking financial company focussing on loan against property. CIFL is part of Capital India Corp. Pvt. Ltd, promoted by Sumit K. Narvar, who is also chairman of Noida-based Trident Realty.
Capital India Finance is a core investment company (CIC) which also includes RemitX, a tech-enabled cross-border remittance player, and RapiPay, a fintech payment and money-transfer startup, Credenc, an education loan fintech and Kuants, an investment platform.
Broadly, India’s housing finance sector has witnessed consolidation with major buyouts such as New York-based private equity firm Warburg Pincus’s ₹4,630 crore acquisition of Shriram Housing Finance Ltd in May for equity and convertible instruments and EQT’s 100% acquisition of Indostar Home Finance for ₹1,750 crore in September.
It also saw some of the most prominent initial public offerings this year. Bajaj Housing Finance went public in September with an issue size of ₹6,560 crore, while Aadhar Housing Finance had a ₹3,000 crore public issue in May.
Source: Mint