New Deal

Faering Capital Invests $30M in Vastu Housing Finance

As published in YourStory on Oct 19, 2023

Vastu Housing Finance Corporation Limited (Vastu) has closed a fund raise from Mumbai-based private equity fund Faering Capital.

The transaction, valued at $30 million, is a secondary sale by funds managed by Multiples Alternate Asset Management Pvt Ltd and other shareholders of the company, the firm said in a statement.

This is Faering’s third investment from its $346 million Fund 3, which had a final close in November 2022. The firm, founded by Aditya Parekh and Sameer Shroff, also holds investments in startups like Go Digit General Insurance, Niva Bupa Health Insurance, CAMS, National Stock Exchange (NSE), Finova Capital, Nykaa, and Plum.

“Housing finance and specifically affordable housing are multi-decadal opportunities in India. Having tracked Vastu’s progress over the last few years, we are confident that the company is well on its way to build a highly profitable, large and respected institutional franchise focused on affordable housing finance,” said Parekh, Co-founder and Managing Director of Faering Capital.

Vastu, a digital housing finance company, has tied up with 40 lending partners and institutional investors, including the likes of National Housing Bank (NHB), State Bank of India (SBI), Bank of Baroda, Canara Bank, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Union Bank, HSBC and others. It has an AUM of $900 million across 15 states.

“We are happy to have Faering Capital join us as a valued partner. Aditya, Sameer and team have great domain knowledge in our industry and have been long-term supporters of Vastu. We look forward to having them as long-term shareholders,” said Sandeep Menon, Founder, MD, and CEO at Vastu.

The startup's proprietary technology platform, Pulse, claims to enable a paperless digital experience and faster turnaround times for customers. Besides, the mortgage-led consumer lender also set up an NBFC venture—Vastu Finserve—which focuses towards vehicle and MSME finance.

Sudhir Variyar, MD and Deputy CEO of Multiples Alternate Asset Management, said, "We warmly welcome Faering Capital as shareholders of the company and look forward to working with them going forward. This marks another milestone in our partnership with Vastu, witnessing the evolution of a shared vision that has led to the establishment of an accomplished institution."

Vastu recorded a Profit after Tax (PAT) of over Rs 285 crore in FY23. As of September, the lender claims to have financially included over 80,000 customers having a monthly income of $500, most of whom don’t have formal access to credit from financial institutions in India due to a lack of documented income.

The company’s board of directors includes former RBI deputy governor Shyamala Gopinath, former global head of retail banking at Standard Chartered Bank, Viswanathan Ramachandran, former head of audit at KPMG, Natrajan Ramakrishna, former Chairman and Managing Director of Andhra Bank, R S Reddy, former Managing Director of NIIT Ltd, Vijay Kumar as Independent Directors.