The National Housing Board (NHB) has given its nod, for the merger of Dewan Housing Group companies Aadhar Housing Finance Ltd and DHFL Vysya Housing Finance Ltd. “We have received the NHB’s nod in May 2017 and have already applied with the National Company Law Tribunal, for the approval. We expect to complete the merger process by August, 2017,” Aadhar Housing Finance CEO, Deo Shankar Tripathi said.
The International Finance Corporation (IFC), which holds 20 per cent stake in Aadhar Housing, may infuse more capital before the merger is effected. “There are talks of some more infusion by the IFC. If they don’t infuse further capital, then, their holding will slip to 10-11 per cent after the merger,” Tripathi said. The promoters had infused Rs 50 crores in Aadhar Housing recently, Tripathi said.
See also: Affordable housing to be growth driver for housing finance market
The merger will help to leverage size and footprint and will help in the reduction of borrowing cost, he added. Under the scheme, Aadhar Housing will be merged into DHFL Vysya but the merged entity will be named as Aadhar Housing Finance. Both the HFCs are engaged in the affordable housing segment. Post-merger, Aadhar Housing will be able to raise public deposits, as DHFL Vysya is a deposit taking HFC.
The combined loan book of both the entities was Rs 5,100 crores, as on March 2017. Tripathi said by March 2018, the loan book will swell to Rs 8,000 crores, with the growth potential in the affordable housing category. The total branch network of the combined entity will reach 270 by August, making it one of the largest HFCs in the country, concentrating on offering formal credit to the low-income group.
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