IIFL Asset Management Ltd, a unit of financial services firm IIFL Holdings, is investing Rs 100 crore ($13.6 million) in Tamil Nadu-based Kadaieshwar Homefin Pvt. Ltd, also known as KE Housing Finance, which has yet to start operations.
IIFL will make the investment through its IIFL India Private Equity Fund, investment banking firm Unitus Capital said in a statement. Unitus Capital served as the financial adviser to KE Housing Finance for this transaction.
The statement further said that the fresh funding will help KE Housing Finance apply for a housing finance company licence, initiate operations, and establish a strong base targeting around 30 locations over the next couple of years.
KE Housing Finance was founded by C Ilango, former managing director and chief executive of mortgage lender Can Fin Homes.
KE Housing Finance’s focus is primarily on low-income households with combined monthly family incomes of around Rs 25,000. It plans to start operations from south India.
The firm had filed an application with apex body National Housing Bank in September for grant of a certificate of registration, according to the regulator's website.
On Monday, The Economic Times reported that the housing finance company may launch operations in January.
IIFL India Private Equity Fund
IIFL is looking to raise around $200-250 million (Rs 1,350-1,700 crore) for this fund, which will raise money from domestic high net worth individuals (HNIs).
IIFL India Private Equity Fund is a close-ended SEBI-registered Category-II Alternative Investment Fund that will focus on professional entrepreneurs in fast-growing sectors like financial services, consumer, healthcare and technology. Its investment strategy is to create new businesses from the ground up.
Other instances where private equity firms have joined hands with a professional team to create a new entity include hotel assets owner Samhi (Equity International, GTI), and renewable energy firms ReNew Power (Goldman Sachs) and Ostro (Actis).