Local investment bank Axis Capital is advising Au Financiers, who is seeking to exit the business after getting a small bank licence from the Reserve Bank of India, the report said quoting two unnamed sources.
The sellers are reportedly seeking five times the net worth of the business which is estimated to be around Rs 1,100 crore.
“In such deals, home loan business is sold at anywhere between 2.5 to 3 times of the net worth,” an investment banker aware of the development said.
“The promoters might sell out completely or would retain the maximum allowed 10 per cent stake and continue to run the business,” said another investment banker.
Incorporated in February 2011, Au Housing Finance is a wholly-owned subsidiary of Au Financiers Ltd. It is engaged in the business of providing housing loans, primarily in the unserved markets of Rajasthan, Maharashtra, Gujarat, Madhya Pradesh, Haryana and Delhi, as per the company’s website.