Bangalore-based affordable housing developer Value & Budget Housing Corporation Pvt Ltd (VBHC) has raised $20 million (Rs 128 crore) from global investment firm Stichting Van Herk Investments, the company said in a statement.
The developer will use the proceeds for its affordable housing projects and new vertical for serviced apartments. The funding will also go towards its expansion plans.
“There is a huge potential in India for affordable housing, especially the affordable service apartments segment. We believe this association will be a perfect marriage of their extensive and global industry knowledge and our vision of delivering world class quality affordable homes," said Jerry Rao, chairman, VBHC.
Aat Van Herk, founder, Stichting Van Herk Investments, said, "This investment is representative of our continued interest in India and our objective of associating with quality partners. This is also an opportunity to play a larger role in boosting the affordable housing market and contribute towards the larger goal of 'Housing for All by 2022' and 'Make in India' programs of the government."
This is the second investment of the firm with VBHC. In June last year, it had backed the company with a $3 million investment at entity level.
With presence in Bangalore, Chennai, NCR and Mumbai, the Jerry Rao-led company has 18,000 homes at various stages of construction. It has projects starting from Rs 13.68 lakh in Mumbai and Rs 25.47 lakh in Chennai and up to Rs 48.55 lakh in Bengaluru.
It has so far raised funding from HDFC, IFC, Carlyle and Caspian Advisors.
While there has been a strong momentum around affordable housing, especially in the last one and half years, mainstream funds have stayed away from the segment. Read here for more. However, a couple of investors, including IFC and Caspian, have sealed deals in this space.
Data show that there is a housing shortage of 19 million, of which a major portion falls in the economically weaker section (EWS) and low income group (LIG). Given the intention of the government to provide housing for all and the latent demand in the affordable section, a slew of developers have announced plans to come out with projects catering to this segment.
Recently, low-cost housing developer Janaadhar raised roughly Rs 60 crore from a group of investors. Tata Housing's affordable development arm raised $25 million from IFC.