Warburg Pincus Leads Major Share Sale in Home First Finance

Warburg Pincus Leads Major Share Sale in Home First Finance

VoM News Desk | November 23, 2023 | 10:27 PM IST | Breaking News | Follow on Google News

Warburg Pincus Leads Major Share Sale in Home First Finance

Warburg Pincus Leads Major Share Sale in Home First Finance

In a significant move in the finance sector, global private equity firm Warburg Pincus, along with two promoter group entities, has sold shares of Home First Finance worth ₹750 crore. This transaction, executed through open market operations on Thursday, marks their second such sale in six months, as per the latest bulk deals data.

Details of the Share Divestment

Warburg Pincus, through its subsidiary Orange Clove Investments BV, offloaded 28,83,819 shares, amounting to a 3.3% stake in the affordable housing financing company, fetching approximately ₹251 crore. An affiliate of Warburg Pincus held a substantial 26.4% stake in the company as of the end of September. Additionally, Aether Mauritius, part of the promoter group, disposed of 23,07,229 shares (2.6% stake) for about ₹201 crore. True North Fund V LLP, another promoter entity, divested 34,60,699 shares, translating to a 3.9% stake, for approximately ₹301 crore.

Impact on Market and Share Prices

The collective sale by these entities was executed at an average rate of ₹870.4 per share, representing a discount of approximately 5% compared to the stock’s previous closing price. This discounted rate resulted in a 4% decrease in the stock’s value on the National Stock Exchange, closing at ₹877.20. Earlier in May, the entities had collectively sold shares worth ₹330 crore, impacting the company’s stock performance.

New Stakeholders and Company Performance

In a related development, Smallcap World Fund Inc, a California-based venture capital firm, acquired a 2.7% stake in Home First Finance by purchasing 2,395,000 shares for roughly ₹208 crore. Fidelity Investments also participated, buying 476,331 shares at ₹870 each, amounting to ₹41.4 crore. Despite these significant transactions, Home First Finance remains a top performer in the non-banking financial company (NBFC) sector, delivering nearly 20% returns in 2023.

VoM News Desk

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