Shriram Group to Foray into Hsg Finance

Group expects to get NHB approval soon, open to selling 49% stake in the business

APURV GUPTA MUMBAI

Diversified non-banking financer Shriram Group is likely to launch its housing finance business in August and is in talks to sell up to a 49% stake, persons familiar with the matter told ET.
The . 40,000-crore Shriram Group, which will compete with players such as HDFC, LIC Housing and Dewan Housing, and banks such as State Bank of India and ICICI Bank, expects to get approval from regulator National Housing Board (NHB) within a few weeks. An investment banking source told ET, “We have been approached to find an appropriate partner for Shriram’s housing finance foray. It is open to selling up to 49% to financial or strategic investor and expects a book of . 4,000 crore over four years.”
The housing finance business will be a 100% subsidiary of Shriram City Union Finance (SCUF) and will have a capital base of . 100 crore. It is headed by Sujan Sinha, who was earlier with Axis Bank. “We are expecting the requisite approval shortly. Nothing has been finalised on the stake sale front. While financial investor is a possibility, we don’t require a strategic investor as we have enough knowledge of the lending business. We have a good market share and we can leverage the existing customer base,” said Subhasri Sriram, ED and CFO, SCUF.
The housing finance company will target middle-income customers, largely in tier-II and tier-III cities, with a ticket size of loans at . 10-30 lakh. SCUF will focus its housing finance operations across the country. SCUF has a customer base of more than 6.25 million borrowers and caters to product segments in retail loans. A separate housing finance entity will help SCUF avoid any asset liability mismatch.