Investor Interest in Housing Finance Sector Grows: TA Associates to Acquire Stake in Vastu Housing Finance

Private equity firm TA Associates is making a significant move in the housing finance sector by acquiring a stake in Multiples PE-backed Vastu Housing Finance Corp. Ltd. The deal, estimated to be around $400 million, will value Vastu Housing Finance at over $1.4 billion, showcasing the growing interest of investors in this sector.

Existing investors in Vastu Housing Finance, including Norwest Venture Partners, 360 One Asset Management, and Creation Investments India, are also increasing their stake in the company through this transaction. Multiples PE, which currently holds a majority stake in Vastu, will be selling a portion of its stake in this investment round.

The latest transaction involving Vastu Housing will involve a mix of secondary and primary fundraises. International Finance Corporation had already invested about $75 million in Vastu Housing in March, as per regulatory disclosures.

Vastu Housing Finance has been steadily growing, reporting net sales of ₹768.5 crore and a net profit of ₹285 crore in 2022-23. The company’s focus on serving the lower and emerging middle-income groups, especially self-employed individuals, has been a key factor in its success.

This move by TA Associates comes at a time when housing finance companies are making headlines with mega transactions. Aadhar Housing Finance recently went public with a ₹3,000-crore IPO, while Warburg Pincus acquired a majority stake in Shriram Housing Finance for ₹4,630 crore.

Vastu Housing Finance’s strong performance and focus on serving underserved segments make it an attractive investment opportunity for TA Associates and other investors in the sector. This strategic move is expected to further strengthen Vastu’s position in the housing finance market.