Shriram Housing Finance Limited (the “Company”), a Mumbai-based affordable housing finance company, promoted by Shriram City Union Finance (Shriram City) and part of the Shriram Group today announced that it has received the second round of equity capital infusion of Rs. 300 Crore, from the parent company i.e. Shriram City. With this round, the total equity infusion in FY22 stands at Rs. 500 Crore. The current infusion will increase Shriram City’s holding in Shriram Housing Finance Limited to 85.02%.
The affordable housing and mid-market segment is witnessing strong demand in tier 2 and tier 3 cities, and the capital infusion will be utilised to fund the rising demand for home loans. The Company has ambitious plans to expand its distribution with primary focus on cross sell through the Shriram Group network to Shriram customers in Andhra Pradesh and Telengana. The capital will also be utilised to fund the expansion plans in the targeted regions.
The net worth of Shriram Housing Finance Limited which was at Rs. 788 Crore as of 30 June 2021, has risen to Rs. 1,088 Crore with this investment.
Commenting on the capital raise Mr. Ravi Subramanian, MD & CEO, Shriram Housing Finance said: “Our parent’s capital infusion will help us expand our footprint and enhance our growth potential. This is also a reinforcement of the groups’ faith in our transformed business model. We would continue to build on our core strengths and maintain our growth trajectory. This would help us outperform our competitors both on business volume and collection efficiency. The market has seen latent demand for housing increase significantly, especially from the low income households where sources of employment remain largely informal. The gap in housing has been addressed by the government and regulatory body policies for affordable housing, which has given rise to an ecosystem where developers and financers along with customers all benefit. The Shriram group has always focused on the bottom of the pyramid and even in housing finance we are growing within our niche segment and see hugh potential there.”