Poonawalla Housing Finance Becomes Grihum Housing Finance

In a strategic move following its acquisition by TPG Capital Asia, Poonawalla Housing Finance has undergone a significant rebranding, emerging with a new identity — Grihum Housing Finance. This transformation comes as TPG Capital Asia acquired a substantial 99.02% equity stake in the company from Poonawalla Fincorp earlier this year.

The Essence of Grihum: Fostering Unity in Homeownership

The new name, Grihum, is a fusion of ‘Grih’ (home) and ‘Hum’ (togetherness), reflecting the company’s commitment to fostering collaboration and unity. Grihum Housing Finance is dedicated to creating the cherished space of a ‘Dream Home’ for its customers, a significant portion of whom are self-made individuals and micro-entrepreneurs in semi-urban, peri-urban, and rural regions, constituting 62% of the business from the self-employed informal sector.

Strategic Goals and Financial Outlook

With a compound annual growth rate (CAGR) of 28% in its Assets Under Management (AUM) over the last six years, Grihum Housing Finance aims to touch an AUM of ₹8,200 crore by March 2024. Looking ahead, the company has set an ambitious target of reaching ₹11,000 crore by the end of the fiscal year 2025.

TPG’s Commitment and Infusion of Capital

Underlining its commitment to Grihum Housing Finance’s growth, TPG has pledged to infuse ₹1,000 crore, with ₹538 crore already disbursed. This capital injection will play a crucial role in supporting the company’s expansion plans and achieving its AUM targets.

Operational Expansion and Customer Focus

Grihum Housing Finance currently boasts a customer base exceeding 75,000, served through a network of 195 branches. The company has plans to further strengthen its presence by adding 2-3 branches each month. Additionally, negotiations with three life and non-life insurance companies are underway for securing a corporate agency license.

Financial Metrics and Fundraising Strategy

As of September 30, 2023, the cost of borrowing for Grihum Housing Finance stands at 8.1%. The company maintains conservative loan-to-value (LTV) ratios, with housing loans ranging between 60% and 70% on average. The overall LTV ratio is positioned at less than 60%.

In line with its growth strategy, Grihum Housing Finance is gearing up to raise approximately ₹2,500 crore. This capital infusion will be orchestrated through a mix of channels, including banks, Non-Convertible Debentures (NCDs), and collaboration with multilateral agencies.

Important Questions Related to Exams

Q: Why did Poonawalla Housing Finance rebrand?

A: Following TPG Capital Asia’s acquisition, the company rebranded as Grihum Housing Finance, signifying a new identity and strategic direction.

Q: What are Grihum’s financial goals?

A: Grihum aims for an ₹8,200 crore AUM by March 2024 and ₹11,000 crore by FY25, backed by TPG’s ₹1,000 crore commitment.

Q: How does Grihum serve its customers?

A: With 75,000 customers, Grihum plans branch expansion and is in talks with insurers for partnerships, focusing on the self-employed sector.

Q: What is Grihum’s fundraising strategy?

A: To fuel growth, Grihum plans to raise ₹2,500 crore through banks, NCDs, and multilateral agencies.