IFC may invest in Jerry Rao’s Value & Budget Housing
International Finance Corporation, the private investment arm of World Bank, is looking to pick up stake in Value & Budget Housing Corporation – the low-cost housing venture backed by Indian IT poster boy Jerry Rao (founder of MphasiS which was sold to EDS). VBHC, whose backers include India’s largest mortgage lender HDFC and global private equity major Carlyle, is planning $24 million capital expansion plan. IFC is expected to invest by equity to part-finance the capex plans.
VBHC, which raised funding from HDFC at both entity and project level, got Rs 17.3 crore from India Financial Inclusion Fund (IFIF) in 2010. It was followed by $26 million or Rs 119.3 crore from the global private equity giant Carlyle Group, along with existing investors, in August 2011. Rao and the other VBHC co-founder P.S. Jayakumar currently hold around 34 per cent stake in VBHC.
Earlier, Jayakumar was Citibank’s country head for consumer business in India & the Asia-Pacific and also headed the consumer lending business in the Asia-Pacific.
VBHC has projects under various stages of development and construction across Bangalore, Delhi-NCR, Chennai and Mumbai. It is also looking at affordable housing in Rajasthan, Gujarat, Maharashtra, Tamil Nadu and Uttar Pradesh, which are under various stages of development.
Rao and Jayakumar also promoted Home First Finance Company, a housing finance firm that targets customers buying their first homes. Home First Finance is backed by Bessemer Venture Partners.
VBHC’s maiden project Vaibhava is located in Bangalore’s Electronic City suburb and has already sold most of its units. The project included 1,854 apartments, a primary health centre, a school, a commercial complex tower and other amenities. It also offered studio apartments, as well as one and two-bedroom flats, within a price range of Rs 5.3-11.5 lakh.
International Finance Corp. is the private equity and venture capital arm of World Bank. It provides capital to early stage companies operating in emerging markets such as Africa, East Asia, South Asia, Eastern Europe, Latin America and the Middle East countries. The firm seeks to invest in finance, oil and energy, manufacturing, healthcare, electronics, auto parts, education, information technology, engineering, logistics, agricultural and pharmaceutical sectors. The firm also offers loans, structured finance, risk management, trade finance and local currency financing services. International Finance Corp. is based in Washington DC, United States of America with additional offices in East Asia and the Pacific, MENA regions, Latin America and the Caribbean, South Asia, Western Europe and Sub-Saharan Africa.