BENGALURU, Sept 20 (Askume) – Shares of IndoStar Capital Finance (INAC.NS) hit their highest in more than three years on Friday, a day after the Indian non-bank lender announced the sale of its home finance unit for $209 million to private equity firm EQT.
The deal will allow IndoStar to focus on its core businesses of auto finance and small business loans, the company said in an exchange filing late Thursday.
Following the completion of the deal, EQT plans to invest Rs 5 billion ($59.84 million) in affordable home loan provider IndoStar Home Finance.
The private equity firm is expanding its financial services portfolio in India after acquiring a stake in education finance company HDFC Credila last year .
Demand for affordable housing in India lags behind the luxury housing boom, but lenders are counting on government support to take advantage of this less-penetrated market.
Bajaj Housing Finance (BAJO.NS) , a lender primarily focused on financing luxury homes that went public this month, entered the affordable housing sector earlier this year, while Godrej Capital is also reportedly eyeing the space.
Shares of IndoStar Capital rose as much as 14% to their highest level since August 2021, before giving back some gains and last traded up 4.8%.
(1 USD = 83.5500 INR)
(This story has been corrected in paragraph 5 to say affordable housing market penetration is low)
