Dewan Housing Finance Corporation Ltd, a private sector housing finance player backed by Caledonia Investment and Sequoia Capital India, is expanding beyond real estate financing and making foray into education lending business.
Dewan Housing Finance said in a filing that it would buy “equity stake of an unlisted non-banking financial company (NBFC) registered with the Reserve Bank of India. The company proposes to foray into the education sector in order to provide a portfolio of education loan and allied services.”
Interestingly, Housing Development Finance Corporation Ltd (HDFC) also entered this segment by acquiring Credila Financial Services from DSP Merrill Lynch Capital Ltd.
Dewan Housing Finance also plans to borrow through a private placement of unsecured redeemable non-convertible subordinated debentures up to Rs 300 crore. The share price of the company closed at Rs 203.85 on Tuesday, down 0.07 per cent in a Mumbai market up 1.71 per cent.
In 2010, Dewan Housing Finance acquired the India mortgage lending unit of Deutsche Postbank AG in a Rs 1,079 crore (€173-177 million) deal.
For Q3 FY12, Dewan Housing reported net interest income (NII) of Rs 183 crore, up 48 per cent year-on-year. The loan portfolio was up 50 per cent YoY during the quarter.
“Loan growth at 50 per cent YoY re-affirms our positive stance on demand potential in tier II and smaller cities. Over the past two decades, Dewan Housing has gained dominant position in mortgage needs of customers in the LMI segment,” a report by Emkay Global stated.
