HDFC to sell 10% stake in its private equity real estate firm to Abu Dhabi Investment Authority

• HDFC has entered into an agreement with the Abu Dhabi Investment Authority (ADIA) to sell a 10% stake in its private equity real estate subsidiary, HDFC Capital.
  
• HDFC says the sale proceeds will be used towards financing affordable housing programmes.
  
• HDFC Capital currently manages a $3 billion funding platform.
  

HDFC, India’s largest private sector housing finance company, has entered into an agreement with Abu Dhabi Investment Authority (ADIA) to sell a 10% stake in its subsidiary, HDFC Capital.

The deal values HDFC Capital at a little under ₹2,000 crore, netting the company approximately ₹184 crore. The proceeds of the stake sale will be used to finance HDFC Capital’s affordable housing programmes, HDFC revealed in its stock exchange filing.

HDFC’s shares were up nearly 1.5% immediately after the announcement.


“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,” said HDFC in its exchange filing.


HDFC Capital is a private equity real estate firm that is an investment manager to HDFC’s affordable housing company. It currently manages a funding platform worth $3 billion (approx. ₹22,800 crore).

“Six years ago we set up HDFC Capital with a vision of progressing in sync with the government's ‘Housing For All’ goal by increasing the supply of affordable homes in India,” said Deepak Parekh, chairman, HDFC.

“This 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,” he further added.

HDFC Capital managed funds currently provide long-term and flexible funding to affordable and mid-income housing projects. Apart from this, the company says it will also invest in firms working on construction technology, clean technology, fintech and more, all geared towards affordable housing.

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