The Carlyle Group to invest $26 million into Value & Budget Housing Corporation

Global alternative asset manager The Carlyle Group today announced it will invest US$26 million into Value & Budget Housing Corporation (VBHC), a pioneer in the construction and development of affordable entry level housing in India. The capital, which will be used to fund the building of these new homes, comes from FCG IX, a part of Carlyle Asia Growth Partners IV (CAGP IV), a US$1.04 billion sector-agnostic growth capital fund. Existing investors in VBHC have also committed additional capital alongside Carlyle. The transaction has been closed. Financial terms were not released.

Building Affordable Housing in Self-Sufficient Communities

VBHC was co-founded by Jaithirth Rao and P.S Jayakumar with a vision to build one million affordable entry level homes over ten years across urban India. More than 1,000 units have been sold in the last 12 months and the sale of another 900 units will start next month. VBHC is setting up an expansive network of integrated housing projects nationwide that will apply the latest industrial engineering and construction technology to improve the construction process and build scale through standardization. VBHC aims to bring value to home-buyers by maximizing their financial options, lowering maintenance costs and ensuring sustainable living through renewable energy and water & waste management. VBHC projects are situated in the urban periphery and are well connected to the city's central transportation system. Each of the projects will be self-sufficient and will contain an on-site English medium school, working women's centre, day care medical centre and a local shopping complex.

Wayne Tsou, Managing Director and Head of Carlyle Asia Growth Capital, said, “VBHC is a play on the strong unmet demand for affordable housing in India, which is estimated at more than US$200 billion. The demand for affordable housing will continue to grow quickly due to urbanization, increasing number of nuclear families, rising income levels and strong desire for home ownership.”

Jaithirth Rao, Chairman of VBHC said, “VBHC is a trusted partner delivering high quality affordable entry level homes to its customers. We are very happy to be associated with The Carlyle Group and hope to leverage their relationships as we continue to fulfill our vision of building a million affordable entry level homes in this country.”

P.S. Jayakumar, Managing Director of VBHC said, “VBHC has been able to transform real estate development into a lean industrial process amenable to mass production with the use of the ‘form’ technology for construction. VBHC plans to replicate the success of project Vaibhava in Bangalore and aims to develop a strong nationwide footprint.”

Shankar Narayanan, Managing Director and Head of Carlyle Growth Capital in India, said, “VBHC is led by a team of visionary entrepreneurs with extraordinary ability and leadership and has amongst the best standards of corporate governance and ethics in the industry. VBHC has developed a differentiated model to cater to this large demand wherein it treats land as raw material and focuses on cost efficient, quick and high quality construction. Carlyle, with a strong commitment to promoting environmental, social and governance initiatives, is pleased to be a part of this endeavor, which will bring significant value to the common man while maintaining high quality.”

CAGP IV invests in high growth companies in key Asian markets including India, China and Korea. With more than US$2 billion in assets under management, CAGP adds value to portfolio companies through its global network, deep local insight from its native investment team, experience in a broad range of industries, expertise in business management and strengths in global M&A and capital markets initiatives. This has allowed CAGP’s portfolio companies to accelerate capacity and market share expansions.

Avendus Capital served as the sole financial advisor to the Company for the transaction.