Centrum Capital, the financial services conglomerate under the leadership of Jaspal Bindra, is reportedly considering the possibility of divesting its stake in its mortgage financing subsidiary, Centrum Housing Finance. According to sources familiar with the matter, Centrum Group, headquartered in Mumbai, currently holds a 74% stake in Centrum Housing Finance, while private equity investor Morgan Stanley PE Asia owns approximately 25%, having invested $190 crore in the company in 2020.
"One of the sources revealed that Centrum is formulating a plan to explore the sale of its stake in its housing finance business and that a formal process is expected to be initiated shortly," the report stated. The housing finance business is estimated to command a valuation of approximately $1,500 crore, as per the source.
The decision to pursue a stake sale in the housing finance business is believed to be prompted by directives from the Reserve Bank of India (RBI). These directives arose in the wake of the acquisition of PMC Bank (now renamed Unity Small Finance Bank) by the Centrum Group and BharatPe consortium in 2021. RBI regulations stipulate that if Centrum continues to maintain a majority stake in the housing finance subsidiary, it cannot engage in the business of mortgage financing.
Centrum's exploration of a stake sale reflects the evolving dynamics within the financial services sector and its commitment to aligning its business operations with regulatory guidelines.