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IFC plans to invest $50 mn in Altico Capital for affordable housing projects

21 February, 2018

International Finance Corporation (IFC), the private sector investment arm of the World Bank, plans to provide debt financing of up to $50 million (Rs 324 crore) to non-banking financial company Altico Capital India Ltd for affordable housing projects.

IFC said in a disclosure that the proceeds will be used to finance residential housing development projects which meet the criteria of affordable housing under the Indian government’s Pradhan Mantri Awas Yojana – Housing for All (Urban) scheme.

The scheme aims to ensure housing for all by 2022.

The investment proposal will be placed before IFC’s board on April 20.

IFC’s latest proposal follows a similar agreement earlier this week to invest around $75 million (around Rs 485 crore) through senior financing in L&T Housing Finance Ltd, a subsidiary of L&T Finance Holdings Ltd. The proceeds will be used to finance developers of affordable housing under PMAY.

Mumbai-headquartered Altico Capital has been among the most prominent debt investors in real estate of late.

Last December, the firm had deployed Rs 1,250 crore (nearly $195 million) across five deals in Hyderabad and Pune.

Altico Capital’s key backers include Clearwater Capital Partners, Abu Dhabi Investment Council and Varde Partners.

The company posted revenues of Rs 588.2 crore and net profit of Rs 270.8 crore in the financial year 2016-17.

The company’s loan book stood at Rs 4,870 crore as of December 31 last year.

IFC’s affordable housing bets
IFC has been increasingly betting on the affordable housing space, which has gained prominence following a push from the central government in 2015.

In a bid to facilitate higher investment, the government had granted infrastructure status to the segment last year. And while presenting his Budget for 2018-19 earlier this month, Finance Minister Arun Jaitley proposed to set up a dedicated fund for affordable housing.

IFC has backed financial institutions that provide money to both buyers and developers of affordable homes and has also supported developers directly.

Last November, IFC teamed up with mortgage lender HDFC to create an $800 million (about Rs 5,185 crore) fund dedicated to affordable housing in India.

Recently, it agreed to create a platform worth $800 million with PNB Housing Finance to support affordable and green housing.

Previously, IFC had also backed Ashiana Housing, Aspire Home Finance, Micro Housing Finance and Aptus Value Housing Finance with on eye on tapping the low-cost housing segment.

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IFC plans to invest $50 mn in Altico Capital for affordable housing projects

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