Morgan Stanley acquires Ummeed Housing Finance equity stake for Rs 164 crore.

Morgan Stanley has purchased an equity stake in Ummeed Housing Finance in the funding round of the company’s Rs 164-crore series-D. Ummeed Housing is operated by Swiss investor LGT, which has purchased the Soros Economic Development Fund’s India-focused fund Aspada.        

A fund operated by global investor Morgan Stanley Private Equity Asia, which owns a minority stake in the company, has led the new funding round. Investment bank Avendus Capital has worked on the deal as the financial adviser to the firm. The round also included current investor LGT Lightstone Aspada. This round of funding comes on the back of the $10-million equity raised in September 2018.

In 2016, Ummeed Housing developed a shop with an emphasis on the informal and low-income markets, mainly in Tier-2 and -3 cities. The organization is a new-age lender that has developed a completely digitized loan acceptance and disbursement process that allows borrower inquiries to be quickly turned around.

It provides secured business loans to the MSME market, in addition to home loans. “By the next financial year, this fundraising gives us clear visibility on the equity front. We will use these proceeds to extend further into new geographies and continue to strengthen our technology platform, focusing on developing state-of-the-art underwriting practices,” said Ashutosh Sharma, founder and MD, Ummeed Housing Finance. He added that the company is targeting doubling its assets in 12-18 months to Rs 1,000 crore.

“For most of this financial year, India’s housing finance market has seen a liquidity crunch, with stress in a couple of large housing finance firms. Fundraising in the current environment from a reputable private equity investor indicates the confidence the fund has shown in the company’s growth narrative and strong business model,” he said.