IndoStar Capital Finance up 5% after selling home finance arm to EQT for ₹1,750 crore

The company added that the transaction is subject to certain customary conditions such as receipt of RBI approval, and approval from lenders and shareholders. Additionally, the company revealed that EQT is planning to invest ₹500 crore into IHFPL following the closure of this transaction. IHFPL’s board has given an in-principle approval for the infusion.

IndoStar stated that the sale of its home finance arm will provide the company with capital to boost growth and enhance value creation in with core verticals of vehicle finance and small business loans.

Ashish Agrawal, partner in the EQT Private Capital Asia advisory team, said that the transaction will add to their efforts to expand their portfolio. Retail lending is a key theme for EQT and India’s housing finance space offers long-term growth opportunities.

“India’s affordable housing finance sector represents a long-term growth opportunity supported by secular demand drivers, favorable government policies, and resilient asset quality across economic cycles,” he said.

For the quarter ended June 30, 2024, the company announced a 36% year-on-year (YoY) decline in net profit to ₹24.9 crore. The company’s net interest income for the quarter came in higher by 28.9% YoY at ₹186.5 crore. IndoStar reported a 76.8% YoY surge in pre-provisioning operating profit to ₹52.6 crore.

Shares of the company have risen by nearly 83% since the beginning of the year. The stock has gained over 84% in the past year.