The Carlyle Group and Caspian Advisors Funds backed Bangalore-based Value and Budget Housing Corporation (VBHC) is planning to raise equity from International Finance Corporation (IFC). The fund raising is to support company's plan to invest around $24 million in various affordable projects.
VBHC was founded in 2008 by Jaithirth Rao and P S Jayakumar with the aim of providing affordable homes coupled with buyer friendly practices and strong governance. Together, Rao and Jayakumar hold about 34% of VBHC’s equity stake.
The other investors in VBHC are Housing Development Finance Corporation Limited (HDFC), First Carlyle Growth IX (a fund managed by The Carlyle Group), and India Financial Inclusion Fund (a fund managed by Caspian Advisors Private Limited).
The total Project cost is estimated at over $24 million and IFC proposes to invest equity to part finance the Project, according to the Corporation.
VBHC is headquartered at Bengaluru and the proposed Projects will be undertaken in the states of Rajasthan, Gujarat, Maharashtra, Tamil Nadu and Uttar Pradesh. VBHC has projects under various stages of development and construction across Bengaluru, Chennai (state of Tamil Nadu) and Mumbai (state of Maharashtra).
Further, the Company is in various stages of identification and procurement of land for developing affordable housing in the states of Rajasthan, Gujarat, Maharashtra, Tamil Nadu and Uttar Pradesh. VBHC is in the process of raising capital from IFC for part-financing the development of the above affordable housing projects.
This investment in the Company lends IFC's stamp of approval to VBHC for the governance practices adopted by Compan and it will make available long term equity capital which is not readily available for the the affordable housing segment in particular, thereby providing financial flexibility to VBHC.
VBHC will benefit through access to expertise across IFC's network in Latin America and other markets where IFC has financed such affordable housing projects and this investment will provide access to IFC's knowledge base in the field of green buildings/construction as the Company plans to adopt green building practices in the design of its projects, said the Corporation in the investment disclosure.
