Merger and Acquisition

Arpwood Partners Acquires Majority Stake in SEWA Grih Rin with Rs 680 Crore Investment

• ByStartupStory     |    May 21, 2024

Arpwood Partners Fund I LLP has announced the acquisition of a majority stake in SEWA Grih Rin Limited (Sitara), an affordable housing finance company, through a substantial investment of Rs 680 crore. This strategic move is part of Sitara’s broader plan to raise Rs 705 crore, with additional contributions from existing shareholders, to bolster its business growth.

The investment, which is pending approval from the Reserve Bank of India, is expected to significantly enhance Sitara’s capacity to assist women in achieving homeownership. “The capital infusion by Arpwood Partners will help enhance the capacity of the company to support women in realising their dream of owning a house of their own. Our unique operating model emphasizes assisting customers to formalise their collateral and helps in their social upliftment,” said Renana Jhabvala, Chairwoman at Sitara.

Sitara, established in 2015, is dedicated to providing housing finance to underserved and low-income households, with a particular focus on women in the informal sector. The company currently manages an AUM of Rs 1,200 crore and serves over 25,000 customers. The additional capital will enable Sitara to expand its reach and impact, with a goal of touching 500,000+ lives in the next five years.

The investment round also sees continued support from existing investors including Abler Nordic, Oikocredit, RNT Associates, HDFC Bank, HDFC Life Insurance, Women’s World Banking Asset Management, and Omidyar Network.

An Arpwood Partners spokesperson expressed optimism about the partnership, stating, “We believe that lending to self-employed customers with informal incomes is a structurally attractive opportunity. We are privileged to be partnering with SEWA and RNT Associates to further build and grow Sitara in its focus segment. We will work with current shareholders to grow the franchise profitably, expand the distribution network, and invest in the team.”

Arpwood Partners Fund I LLP is known for investing in mid-market franchises, emphasizing strategic clarity, empowered management teams, and operational excellence. Prior to this, Arpwood Partners promoted SBFC Finance Ltd before exiting in May 2024.

DC Advisory India acted as the exclusive advisor for the transaction, while Trilegal provided legal counsel to Sitara and its existing shareholders. Vertices Partners advised Abler Nordic and Oikocredit, and Anagram Partners advised Arpwood Partners.

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