Shubham Housing Development Finance raises $20M from investors

Housing finance provider Shubham Housing Development Finance Company has raised Rs 122 crore ($20 million) in its recent round of funding from Motilal Oswal Private Equity (MOPE) and existing investors. 

The existing investors include mid-stage venture fund Helion Venture Partners, Elevar Equity Mauritius, early stage growth fund provider ACCION’s Frontier Investment Group and Saama Capital. MOPE invested around Rs 62 crore while the rest came from the existing investors. 

The housing finance provider had raised Rs 43 crore in 2012 from the venture funds mentioned above. 

“Shubham strives to use capital efficiently by minimising capital expenditure; a large portion of these funds will go into providing loans and expanding reach,” says Sanjay Chaturvedi, CEO at Shubham Housing Development Finance. 

As of July 2014, the firm’s loan book stood at Rs 235 crore. With the fresh round of funding, Shubham’s net worth is around Rs 172 crore. The investors together hold 75 per cent in the company while the rest is distributed amongst Ajay Oak, Sanjay Chaturvedi and ESOP for employees. 

As of March this year, Shubham had 50 branches across India and 418 employees. The company provides loans at an interest rate ranging between 17 per cent and 22 per cent. 

The housing finance company was incorporated in 2010 by Sanjay Chaturvedi and Ajay Oak and started operations out of Gurgaon in 2011. Shubham provides mortgages and home-improvement loans to the working class population who is excluded from formal credit system and belongs to the lower income group. 

MOPE recently invested Rs 75 crore in building facade manufacturer Glass Wall Systems (India) and raised its stake in Delhi-based non-banking financial institution Intec Capital to over 32 per cent.

(Edited by Joby Puthuparampil Johnson)

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