Centrum Housing Finance Limited (CHFL), the affordable housing finance arm of the diversified Centrum Group, has entered into a binding agreement to acquire the housing finance business of National Trust Housing Finance Ltd (NATRUST).
CHFL will be acquiring the business for Rs 112 crore. The acquisition will propel the company’s assets under management (AUM) to over Rs 1,000 crore from Rs 700 crore at present.
NATRUST is a Chennai-based affordable housing finance company with a presence in 17 locations across four states in South India. The company has a loan book of over Rs 300 crore and a 149-member team.
It primarily provides retail loans of under Rs 25 lakh to salaried individuals across its network of branches.
According to the agreement, CHFL will acquire the housing finance business, including the loan portfolio, branches and employees.
CHFL commenced operations in 2017 and offers home loans, loans against property, construction and home extension loans with a focus on servicing low and middle-income groups. It has a presence across 10 states in the country.
The acquisition is expected to help CHFL expand geographical coverage, and add origination capacities to augment organic growth.
“There is a growing demand for affordable housing in India, beyond metros and Tier 1 cities. Small cities are witnessing a higher demand, driven by greater urbanisation, digitisation, better infrastructure, and connectivity.
The acquisition consolidates our presence in South India, and will help us increase our penetration across our chosen geographies,’’ said Jaspal Bindra, executive chairman of the Centrum group.
CHFL said over the last few years, it has expanded the branch network, built a strong underwriting team, and established fresh borrowing relationships with banks and financial institutions.
In February 2020, a fund managed by Morgan Stanley PE Asia had invested around Rs 190 crore to acquire a minority stake in the company.
“NATRUST’s niche focus in southern geographies together with its fine talent, complements Centrum’s focus across other markets very well,’’ said S. Rajagopal, chairman, National Trust Housing Finance.
