Gurgaon-based mortgage lender Shubham Housing Development Finance Company has raised its Series D round of funding from investors led by PremjiInvest, the family investment arm of Wipro Ltd chairman Azim Premji.
The overall round was Rs 305 crore (about $48 million), the company said in a statement. This included Rs 235 crore in primary infusion and the remaining in secondary share sales, according to VCCEdge, the data research arm of VCCircle.
Existing venture capital investor Helion Venture Partners and impact VC fund Elevar Equity also put money in the round while early-stage growth fund provider ACCION’s Frontier Investment Group and Saama Capital exited.
As part of the funding deal, PremjiInvest partner Rahul Garg will join Shubham’s board. “Shubham has scaled up to be one of the leading affordable housing players by building fully automated underwriting and risk management practices, through their in-house sourcing mechanism, which makes the company unique,” said Garg.
Shubham CEO Sanjay Chaturvedi said the company aims to grow its loan book six times to Rs 6,000 crore in the next five years.
The lender was founded by Ajay Oak and Chaturvedi in 2010 and started operations the following year. It provides retail home loans for up to 15 years to buy or construct a property. It largely caters to low-income customers such as skilled workers, who find it difficult to get loans from banks due to a lack of formal income proofs.
In 2014, the company had raised Rs 122 crore from Motilal Oswal Private Equity and other investors. It had raised Rs 43 crore in 2012.
The company’s total income for the year through March 2017 was Rs 141.54 crore. It operates 88 offices in 12 states, according to its website.
Housing finance companies catering to low-income earners or offering loans for low-cost houses have garnered high investor interest ever since Prime Minister Narendra Modi, in 2015, launched the “Housing for All” scheme to provide housing facilities to everyone in urban areas by 2022. The programme gave a boost not just to developers looking to construct low-cost housing projects but also to finance companies in this segment.
Chennai-based Aptus Value Housing Finance India Ltd and Delhi's Ummeed Housing Finance Pvt. Ltd are among the other mortgage lenders that have raised funding from private investors in recent years.
Avendus Capital was the exclusive financial adviser to Shubham and its shareholders for the transaction.