IVF-Baring set to acquire ICICI Home Finance through a 2500 crore deal

A joint venture by private equity firm India Value Fund (IVF) and buyout fund Baring PE Asia are all set to acquire ICICI Home Finance. The transaction, valued at $372 Million is expected to close soon.

Investment bankers have reported that IVF is expected to put in around $100 Million and Baring will be contributing $272 Million. Initially, both IVF and Baring had put separate bids but were not shortlisted. ICICI bank was close to sealing the deal with TPG Capital. However, a revised joint bid by IVF and Baring has reportedly turned the tide in their favour.

ICICI Bank holds a 100% stake in ICICI Home Finance, which posted a profit of R180 crore in FY16, down 9% over the previous year. The lender had put the home finance business on the block a year ago and according to media reports was expecting a valuation of around R4,400 crore.

According to rating agency Icra, the Indian mortgage market is expected to grow by 17-19% in coming years with a negligible risk of defaults. Softening interest rates are expected to have a positive impact on asset quality and housing finance companies have generated significant interest among private equity funds. In February last year, US private equity fund Carlyle Group purchased a 49% stake in PNB Housing Finance from Destimoney Enterprises for R1,600 crore. Again in February this year domestic PE fund Kedaara Capital and Partners Group purchased the mortgage arm of Jaipur-based lender Au Financiers for R950 crore.

Source: Financial Express