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Aadhar becomes one of the leaders in affordable housing finance

Published in Banking & Finance Friday, 08 December 2017 17:33

 

•Merger between Aadhar Housing Finance Ltd (Aadhar) and DHFL Vysya Housing Finance Ltd. (DHFL Vysya), both Wadhawan Global Capital (WGC) subsidiaries, receivedapproval from the National Company Law Tribunal (NCLT), Bengaluru Bench.

•The merged entity will be called Aadhar Housing Finance Ltd (Aadhar); thus itbecomes one of the largest players in affordable housing finance for the low-income segment

•Deo Shankar Tripathi, former CEO of Aadhar has been appointed as the Managing Director and CEO of the new merged entity

•With a combined group experience of over 3 decades, it now has a pan-India presence across19states with 270 branches, 2800+ employees and an AUM of Rs. 6000 crore

•International Finance Corporation (IFC) will continue to hold its equity participationin the merged entity and WGC will hold the majority stake.

Aadhar Housing Finance Ltd has announcedthe successful completion of the merger with DHFL Vysya Housing Finance Ltd. Aadhar Housing Finance Ltd (Aadhar) and DHFL Vysya Housing Finance Ltd (DHFL Vysya) are both subsidiaries of the Wadhawan Global Capital (WGC). The approval received from the National Company Law Tribunal (NCLT), Bengaluru Benchcompleted the last lap of the mergerprocess which was sanctioned by the National Housing Bank (NHB).

 The Corporate Office of the merged entity will remainin Mumbai, and it will retain the name Aadhar Housing Finance Limited (Aadhar) and have a consolidated pan-India presence of 270 branches across 19states. The operational integration process following the merger has already been completed andMr. Deo Shankar Tripathi, current CEO of Aadhar will continue to leadthe merged entity Aadharas the Managing Director.

The rationale for the merger of the two entities lies in their common business strategy and presence in different geographiesof the country. Both, Aadhar and DHFL Vysya provide housing finance to low-income sections but in mutually exclusive locations. While Aadhar is a well-established financial services brand in North, West and East India, DHFL Vysya has a strong foothold in South India. Moreover, the merger aims to simplify the group structure, enhance customer service focus and streamline operational efficiencies. 

Commenting on the development, WGC Chairman Kapil Wadhawan said, “The merger is a historic leap forward for the two WGCgroup companies. It has created one of the largest housing finance companies catering to the low-income segment in India.The magnitude of operations combined witha nationwide network will empower us to strengthen the socio-economic fabricfurther by taking the ‘Housing for All’ missiontothe hitherto marginalized, unbanked sections of the society. We aim to seize the opportunities ahead through integration of technological best practices and increased investments in people and processes.We are confident of the success of the new venture under the able leadership of Deo Shankar Tripathi, who has a wealth of experience in the affordable housing segment”.

The International Finance Corporation (IFC) will continue to hold its equity stake in the new entity while WGC will hold the majority stake. Aadhar will have a loan asset book of ~ INR 6000 crore - totalling INR 3200 crore outstanding loans of Aadharand INR 1800 crore loans of DHFL Vysya in FY17.In FY18, the merged entity expects to see its loan book stand at INR 8,000 crore – registering an increase of over 60% in its current loan asset book.

Deo Shankar Tripathi, Managing Director and CEOof the mergedentity commented, “Aadhar Housing Finance Ltd.(Aadhar)brings together the assets and strengths of both the organizations creating a unique opportunity to lead India’s affordable housing finance sector. Itpromises positive returns for the entire stakeholder valuechain whilethe simplified structure of the merged entity enables improved corporate governance. A potential game-changer, I believe the mergeris a transformative milestone that will help us maximize value especially in the context of an increasingly competitive marketplace for all stakeholders including our customers and employees. Personally, I am excited about my new role with the organization. I believe that together with my team, we will be able to contribute significantly towards the ‘Housing for All’ mission.”

With a combined strength of over 2800 employees and having similar cultural ethos with both companies being WGC entities, the merger will createa stronger organisation with minimal culture re-alignment. Increased operational efficiency-led savings and better implementation of technology and best practices will ensure that AHFL continues growing taller as a market leader with an empathy-led customer focus. 

 

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