Mortgage firm HDFC Ltd on Wednesday announced sale of a 10 per cent stake in its private equity arm HDFC Capital Advisors to a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) for about Rs 184 crore.
ADIA is also the primary investor in the alternative investment funds managed by USD 3 billion-HDFC Capital. Set up in 2016, HDFC Capital is the investment manager to HDFC Capital Affordable Real Estate Funds 1, 2 and 3; and is aligned with the government's goal to increase housing supply and support the Pradhan MantriAwas Yojana - 'Housing for All' initiative, HDFC Ltd said in a statement. The funds managed by HDFC Capital provide long-term, flexible funding across the life cycle of affordable and mid-income housing projects, including early-stage funding, it said.
In addition, the funds will invest in technology companies such as fin-tech and clean-tech engaged in the affordable housing ecosystem. It is to be noted HDFC announced earlier this month announced to merge with country's largest private lender HDFC Bank to create a banking behemoth. Once the deal is effective, HDFC Bank will be 100 per cent owned by public shareholders, and existing shareholders of HDFC will own 41 per cent of the bank, according to stock exchange filings by the firms.
HDFC Chairman Deepak Parekh said the investment by ADIA will enable HDFC Capital to leverage ADIA's global expertise and experience to further propel HDFC Capital towards becoming a leading investment platform for global and local investors across multiple strategies and asset classes in the real estate and technology ecosystem. HDFC Capital is a leading provider of affordable housing project finance, with an established track record of supporting the development of new residential stock across the country, Mohamed AlQubaisi, executive director of the Real Estate Department at ADIA, said.
According to the statement, HDFC Capital's target is to finance the development of one million affordable homes in India through a combination of innovative financing, partnerships and technology, whilst focusing on sustainability. In order to achieve this objective, the company is in active discussions with leading global investors to raise additional funds to be invested in development of affordable and mid-income housing projects in India, it added.