Blackstone to acquire IFC-backed Aadhar Housing Finance
Photo Credit: Reuters

Blackstone Group, the world's largest private equity firm, has inked a pact to acquire Aadhar Housing Finance Ltd, one of the selling shareholders said on Saturday.

Blackstone will acquire the stake in Aadhar Housing from controlling shareholders Dewan Housing Finance Corporation Ltd, financial services group Wadhawan Global Capital Ltd as well as group chairman Kapil Wadhawan and his family.

Dewan Housing said in a stock-exchange filing it will sell its entire 9.15% stake in Aadhar Housing. Wadhawan Global as well as group chairman Kapil Wadhawan and his family will also sell their stake. The proposed transaction is subject to regulatory and other approvals. 

Wadhawan Global owns almost 70% of Aadhar Housing while Kapil Wadhawan and his family owns another 1.5%, according to the mortgage lender's annual report. Including Dewan Housing's stake, the promoter shareholding in the mortgage lender is about 80%. 
Wadhawan Global also owns 38% of Dewan Housing and controls the group's financial services businesses.

International Finance Corporation (IFC), the World Bank's private-sector investment arm, held a tad below 17% stake in Aadhar Housing at the end of March 2018, the lender's annual report shows. It isn't clear whether IFC has also sold its stake.

Dewan Housing didn't disclose financial details of the transaction. However, the deal is believed to be worth around Rs 3,000 crore including Rs 800 crore primary infusion by Blackstone.The Economic Times reported, citing a source it didn't name, that the deal is worth about Rs 2,700 crore ($378 million).

Aadhar provides home financing to lower- and middle-income segments. Wadhawan Group had been looking to sell Aadhar for the past few months. Media reports had previously reported that non-bank lender Hero Fincorp Ltd and Baring Private Equity Asia were also in the race for Aadhar.

For Dewan Housing and Wadhawan Group, the transaction is the latest in a series of measures in recent months to cut debt and ease investor concerns related to a liquidity crunch that plagued the broader non-banking financial sector after debt defaults by Infrastructure Leasing & Financial Services. 

Shares of Dewan Housing have slumped 84% since September last year. The shares have come under greater pressure over the past few days after a media report alleged Dewan Housing of financial misconduct and said that it was under a government probe. Dewan Housing has denied the allegations.

In December, Dewan Housing had agreed to sell its entire stake in the mutual fund business DHFL Pramerica to its US joint venture partner Pramerica Financial to focus more on its core business. A few days ago, global alternative investment management firm Oaktree Capital Management LP invested Rs 1,375 crore to buy loans from Dewan Housing.

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