Housing Finance Company Ummeed Raises INR 81 Cr Funding From CX Partners

The company is now looking to penetrate deeper with branch expansion in the existing states and grow in newer geographies as well

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The Gurugram-based affordable housing financier Ummeed has said to have raised, in a secondary transaction, INR 81 crore in a funding round led by private equity fund CX Partners that has recently acquired a substantial part of Lok Capital’s (an early investor in Ummeed) equity stake.

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The valuation metrics at which the transaction was concluded, has said to have re-affirmed the company’s ability to navigate the course of COVID-19 successfully, driven by an underwriting model, and early adaptation of a ‘tech and touch’ play driving growth.

The company has said to have recorded a collection efficiency of over 97 per cent and a GNPA of less than 0.15 per cent for the quarter ended September 2020. Monthly disbursals on October 20 had crossed pre-COVID level disbursals for the same period, last year.

The establishment maintains that it continues to enjoy the support of multiple lenders and has also, recently availed attractively priced refinancing support from the National Housing Bank. With over INR 750 crore disbursed, since its foundation, the company is now looking to penetrate deeper with branch expansion in the existing states and grow in newer geographies as well.

“We are delighted to welcome CX as a partner, in our growth journey for 2021-22 and beyond,” remarked Ashutosh Sharma, founder, and managing director, Ummeed Housing Finance.

The India-focused private equity fund joins the cap table along with Morgan Stanley and LGT Impact.

“CX is excited to invest in Ummeed, an emerging leader in an underpenetrated sector with vast growth potential. Ummeed has the business model and leadership to successfully play a leading role in technology-aided financial inclusion in India,” added Vinayak Shenvi, partner, CX Partners.

Investment bank Avendus Capital acted as the exclusive financial advisor to the transaction and Alvarez and Marsal were the financial due diligence advisor to CX Partners.

Recently, CARE ratings have upgraded Ummeed from BBB to BBB+ and said that the company has experienced promoters and senior management team with healthy capitalization backed by periodic equity infusion, strong business growth during FY 20, adequate risk management and control and liquidity.