Warburg Pincus is investing Rs 700 crore in Home First Finance Company, which operates in the affordable segment, through a combination of primary funds and secondary sales by existing shareholders.

Home First is backed by private equity firms True North and Bessemer Venture Partners. The company said in a statement that it has entered into definitive agreements with Orange Clove Investments BV, an affiliate of Warburg Pincus LLC.

The statement was silent on how much equity the global private equity major will pick up for the money being invested or the valuation at which the investment is being made.

Home First is an affordable housing-focused finance company providing loans to first-time home builders and buyers. Over the past 10 years, it has sanctioned loans to over 50,000 customers across 11 states but largely in Gujarat, Maharashtra, Karnataka and Tamil Nadu. It closed 2019-20 with a loan book of Rs 3,618 crore and had a net worth of Rs 933 crore and gross bad loans of 0.87 per cent.

Its customers are typically salaried customers working in small firms or self-employed customers who run small businesses. The company said that it deploys proprietary machine learning and customer scoring models for underwriting and delivers quick turnaround time to its customers.

“Warburg’s investment is an acknowledgement of our inherent strengths — focus on salaried customers, investments in technology, all of which have helped us,’’ Home First chief executive officer Manoj Viswanathan said.

Warburg managing director Narendra Ostawal said Home First has had a remarkable journey in a relatively short span of 10 years. “We are keen to partner True North and back the Home First management in its next phase of expansion,” Ostawal added.

The New York-based Warburg has over $ 53 billion in private equity assets under management invested across 185 companies across sectors and geographies.

Founded in 1999, True North is a leading home-grown private equity firm with a focus on investing in and transforming mid-sized profitable businesses into large well-established businesses.

True North has launched six separate investment funds with a combined corpus of USD 3 billion, including co-investments through which it has added value to over 50 businesses over the past 20 years.

Ambit Capital was the lead advisor on the transaction, while Axis Capital was the co-advisor.

Home First is planning to come out with an IPO and it had filed draft papers with the market regulator in November last year.