HDFC will sell 10% Stake in its Private Equity Real Estate Firm

India’s largest private sector housing finance company, HDFC, has inked an agreement with Abu Dhabi Investment Authority (ADIA) to sell a 10% stake in HDFC Capital. HDFC Capital is a subsidiary of HDFC. As soon as this news surfaced HDFC’s shares immediately rose nearly 1.5%. In its exchange filing, HDFC stated: “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.” The signed agreement valued HDFC Capital at a little under ₹2,000 crore, netting the company approximately ₹184 crores.

The Housing Finance Company in its stock exchange further informed that the capital raised after selling the stake sale will be utilized to finance HDFC Capital’s affordable housing programs. Chairman of HDFC, Deepak Parekh, in a statement, said: “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.” HDFC Capital is a private equity real estate firm that is an investment manager to HDFC’s affordable housing company. Currently, it manages a funding platform worth $3 billion.