Ummeed In News
This is Ummeed Housing Finance Pvt. Ltd.’s Media Centre, here you can have a glimpse of our corporate and brand announcements. You can also access our press releases, media reports, interviews and articles across print, online and electronic channels.
Impact investor Lok Capital scores another profitable exit with housing finance NBFC
Impact investor Lok Capital has booked a profitable exit from a four-year old investment in a non-banking finance company (NBFC) that operates in the affordable housing finance segment.
On Friday, private equity firm CX Partners acquired a substantial part of Lok Capital’s equity stake in Gurugram based Ummeed Housing Finance via secondary transaction worth Rs 81 crore.
According to a person aware of the transaction, the impact investor earned a 36% internal rate of return (IRR) in the secondary stake sale and over 40% IRR cumulatively. Private equity and venture capital firms typically target an IRR of 20-30% in local currency terms in emerging markets.
Email queries to Lok Capital didn’t elicit responses at the time of publishing this article. Ummeed said Lok Capital has made returns well north of industry benchmarks and continues to retain a small stake in the company.
According to VCCEdge, Lok Capital invested a total Rs 41 crore in the company over three tranches, starting from 2016. Early last year, Morgan Stanley Private Equity Asia invested in Ummeed. The deal saw Lok Capital sell equity stake worth about Rs 21 crore via a secondary transaction.
Cumulatively, the impact venture capital firm has realised a little over Rs 100 crore on the Ummeed investment.
Lok Capital is currently investing from its fourth fund, dubbed Lok Capital Growth Fund IV, which was launched in late 2018. In August 2019, Dutch development finance company FMO announced its intent to invest $15 million (Rs 107.4 crore) in the fourth fund.
While announcing the CX Partners investment last week, Ummeed said the robust valuation metrics at which the transaction was concluded, has reaffirmed the company’s ability to navigate the Covid-19 pandemic successfully, driven by a robust underwriting model, a focused collections team and early
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Ummeed In News
This is Ummeed Housing Finance Pvt. Ltd.’s Media Centre, here you can have a glimpse of our corporate and brand announcements. You can also access our press releases, media reports, interviews and articles across print, online and electronic channels.
Morgan Stanley PE backs Ummeed Housing in latest financial services bet
Morgan Stanley Private Equity Asia has invested in Ummeed Housing Finance Pvt. Ltd, as it continues to pour money into Indian financial services companies.
Gurugram-based Ummeed Housing said in a statement it has raised Rs 164 crore ($23 million) in its Series D funding round from the PE firm and existing investor LGT Lightstone Aspada.
Ummeed Housing is the second Indian company in which Morgan Stanley PE Asia has invested in February. It had invested Rs 190 crore in Centrum Housing Finance Ltd, a unit of Centrum Group, earlier this month.
The twin transactions come at a time when the PE firm is raising its fifth Asia fund. VCCircle reported in September last year that it had raised $366 million for the new vehicle.
Previously, in the financial services segment, the PE firm had invested in Jaipur-based Kogta Financial (India) Ltd, Janalakshmi Financial Services (now Jana Small Finance Bank) and Five Star Business Finance.
Ashutosh Sharma, founder and managing director at Ummeed Housing, said in the statement that the company plans to use the funds to expand in new regions and strengthen its technology platform.
Avendus Capital acted as the sole adviser to Ummeed for the transaction, according to the statement cited by multiple media reports.
Ummeed Housing aims to increase its assets under management from Rs 500 crore to Rs 1,000 crore in the next two years, the statement said.
“Affordable housing finance presents a large untapped opportunity that Ummeed intends to address through its scalable operating model built with the right blend of technology, people and processes,” said Nirav Mehta, managing director at Morgan Stanley Private Equity Asia.
Ummeed Housing was founded in January 2016 by Ashutosh Sharma, who had spent 25 years at Citibank, HSBC and Bank of Montreal. The company provides loans to families with low and informal income. It offers loans ranging from Rs 3 lakh to Rs 25 lakh to buy and build apartments and houses. It also makes loans against property. Haryana, Rajasthan, Uttar Pradesh, and the National Capital Region are its key markets.
In 2018, Ummeed Housing Finance Pvt. Ltd raised Rs 60 crore ($8.3 million) from Zurich-headquartered LGT Impact and Rs 5 crore ($690,000) from existing social-impact investor Lok Capital in a Series C round.
Earlier, it had raised Rs 36 crore in a Series B round from existing investors Lok Capital and Duane Park in May 2017.
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Ummeed In News
This is Ummeed Housing Finance Pvt. Ltd.’s Media Centre, here you can have a glimpse of our corporate and brand announcements. You can also access our press releases, media reports, interviews and articles across print, online and electronic channels.
Ummeed Housing Finance raises funds led by Morgan Stanley PE
Ummeed Housing Finance Pvt. Ltd has raised ₹164 crore in a Series D equity round led by a fund managed by Morgan Stanley Private Equity Asia.
Existing investor LGT Lightstone Aspada, the India-focused impact investment platform of LGT Lightstone, which had invested $10 million in Ummeed in 2018, also participated in the new round. Avendus Capital acted as the exclusive financial adviser to Ummeed on the transaction.
Ummeed, the Gurugram-based affordable housing financier, started out in 2016. It caters to the informal and low-income segment predominantly in Tier II and Tier III towns and operates in Rajasthan, Haryana, Delhi-NCR, and Uttar Pradesh. It offers₹3 lakh to ₹50 lakh loans for home purchases, home construction, home renovation, loan against property, and business loans. “This round of fund-raising gives us clear visibility on the equity front before entering the next financial year. We will use these proceeds to expand in new geographies and continue to strengthen our technology platform, with a focus on building strong underwriting practices. We are moving into the growth stage," said Ashutosh Sharma, founder and managing director, Ummeed Housing Finance. The company aims to double its assets under management (AUM) from ₹500 crore to ₹1,000 crore over the next 12-18 months.
“Affordable housing finance presents a large untapped opportunity that Ummeed intends to address through its scalable operating model built with the right blend of technology, people and processes. We are excited to partner with UHFL in its next phase of growth," said Nirav Mehta, managing director of Morgan Stanley Private Equity Asia.
Housing finance companies and non-banking financial companies have been grappling with a liquidity crisis, downgrades, and defaults for more than a year now.
“The housing finance sector in India has seen a liquidity crunch for most of this financial year, with stress in a couple of large housing finance companies. Fund raising from a credible private equity investor in the current environment signifies the trust the fund has shown in the growth story and the robust business model of the company," Sharma said.
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Ummeed In News
This is Ummeed Housing Finance Pvt. Ltd.’s Media Centre, here you can have a glimpse of our corporate and brand announcements. You can also access our press releases, media reports, interviews and articles across print, online and electronic channels.
Morgan Stanley puts Rs 164 crore in Ummeed HFC
Morgan Stanley has picked up an equity stake in Ummeed Housing Finance in the company’s Rs 164-crore series-D funding round. Housing is backed by Swiss investor LGT, which has acquired India-focused fund Aspada from Soros Economic Development Fund.
The latest funding round has been led by a fund managed by global investor Morgan Stanley Private Equity Asia, which acquired a minority stake in the company. Investment bank Avendus Capital acted as the financial adviser to the company on the transaction. Existing investor LGT Lightstone Aspada also participated in the round. This equity round comes on the back of the $10-million equity raised in September 2018.
Ummeed Housing set up shop in 2016 and is focused on the informal and the low-income segment, predominantly in tier-2 and -3 towns. The company is a new-age lender having built a fully digitised loan approval and disbursal process, which allows for a quick turnaround of customer requests.
Besides home loans, it offers secured business loans to the MSME sector. “This fundraising gives us clear visibility on the equity front before the next financial year. We will use these proceeds to further expand in new geographies and continue to strengthen our technology platform, with a focus on building state-of-the-art underwriting practices,” said Ashutosh Sharma, founder and MD, Ummeed Housing Finance. He added the company is targeting to double its assets to Rs 1,000 crore in 12-18 months.
“The housing finance sector in India has seen a liquidity crunch for most of this financial year, with stress in a couple of large housing finance companies. Fund raising from a credible private equity investor in the current environment signifies the trust the fund has shown in the company’s growth story and robust business model.” he added.
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