Warbug to pare Home First stake before acquiring Shriram Housing
Subscribe to enjoy similar stories. Mumbai: The Reserve Bank of India has asked private equity firm Warburg Pincus to bring down its stake in mortgage lender Home First Finance to 20% or lower before completing the proposed acquisition of Shriram Housing Finance, according to two people involved in the transaction. “Warburg has to divest 3% of their stake in Home First; they currently have around 23%.
The regulator has asked them to keep it at 20% or below because they are competing HFCs (housing finance companies)," the person quoted earlier told Mint on the condition of anonymity. “They’re trying to sell that out." Another person privy to the transaction said that the regulator is in the preliminary stage of discussions with all stakeholders to figure out the contours of the deal and ownership transfer. Shriram Housing Finance and Home First Finance are affordable housing-focused non-bank lenders.
Shares of Home First Finance are listed on the exchanges, while Shriram Housing Finance is unlisted. Shriram Finance had in May 2024 announced the sale of its housing finance subsidiary to Warburg Pincus’s affiliate company Mango Crest Investment. The proposed transaction is valued at ₹4,630 crore for equity and convertible instruments of the housing financier.
Shriram Finance holds a controlling stake in Shriram Housing, while private equity firm Valiant Partners L.P. (Valiant), Mauritius, owns the rest. As a part of this transaction, Valiant will also completely divest its stake to Warburg Pincus.
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