Dewan Housing Fin buys 85.91% in Vysya Bank Housing Fin
By Our Banking Bureau | 09 Jan 2003
VBHF has a total asset base of Rs 200 crore and has a home loan customer base of approximately 7,500, with 98 per cent of this concentrated in the retail segment.
Speaking on the occasion, DHFL managing director Kapil Wadhawan said the acquisition is a step towards growth for a dominant housing finance company like DHFL and will go a long way in further improving its operational capability by size, thereby improving its competitive edge in the housing finance industry.
The decision has been facilitated by VBHF’s good asset quality and concentration on retail customers which is in concurrence with DHFL’s objective of delivering single-window comprehensive financial and advisory assistance to its customers, he said.
“DHFL has established a niche in the southern part of the country with 28 per cent of its total home loan assets, originating from these markets. Since VBHF also has a strong presence in south, this acquisition will help DHFL further consolidate and add synergy to increase its penetration in these niche markets,” Wadhawan added.
Commenting on the transaction, ING Vysya president V Raghunathan said: “The housing finance arm was set up as an independent entity to take advantage of the beneficial operating and regulatory environment for housing finance companies at that time. With the changes in regulatory environment and the increasing trend towards securitisation of housing loans, there was little synergy for the bank to have a separate company exclusively for housing loans. As such, the bank was exploring various restructuring opportunities for VBHF. We have now got an acceptable offer from DHFL and we have decided to exit VBHF.”
The due diligence of the transaction was carried out by PricewaterhouseCoopers and Nishith Desai and Associates. Rabo India Finance Pvt Ltd acted as advisors for DHFL in the transaction.
DHFL, in the meantime, to provide total financial solutions to its customers, has ventured into distribution of insurance products in the life segment. DHFL has entered into an agreement with Birla Sun Life Insurance Company.
Also, to provide better value-added services to home loan seekers, a new entity, DHFL Property Services, has been formed to assist homebuyers to identify good homes across Mumbai, Thane, Navi Mumbai, Pune and Bangalore. This service is provided free of cost to homebuyers.
DHFL’s growth can be complemented by the fact that its disbursements rose by almost 100 per cent during the year ended 30 September 2002 amounting to Rs 195 crore compared to disbursements of Rs 103 crore for the corresponding period in the previous year.
