DHFL takes over control of Vysya Bank Housing Finance

Our Banking Bureau
02 July 2003

DHFL had initiated the process of acquiring an equity stake in VBHFL early this year. VBHFL 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.

DHFL managing director Kapil Wadhawan says the acquisition formalities have been completed and DHFL is all set to take control over the VBHFL management. "This acquisition will help DHFL further consolidate and add synergy to increase its penetration in niche markets."

This acquisition is a step towards growth for a rapidly growing housing finance company like DHFL. Also this will go a long way in further improving its operational capability thereby improving its competitive edge in the housing finance industry, says Wadhawan. Even after DHFL acquiring an 85.91-per cent stake, VBHFL will continue to function as a separate identity and will be a subsidiary of DHFL.

R Nambirajan, the former managing director of PNB Housing Finance, will head the operations of the subsidiary and Wadhawan will be the non-executive chairman.

Meanwhile, in what has given a fillip to DHFL''s plans to grow inorganically to add to the rapid growth in its own business, International Finance Corporation (IFC), the private sector arm of the World Bank group, has signed an agreement to provide a loan of Rs 600 million ($13 million) to DHFL.

Says Wadhawan: "IFC''s decision to grant the loan to DHFL speaks for our commitment towards homebuyers in India, especially those in the rural and semi-urban markets. The funds raised through IFC''s loan will be used for on-lending to homebuyers who need financial assistance. The loan will help us broaden DHFL''s customer reach."