Arpwood Partners acquires majority stake in SEWA Grih Rin with Rs 680 Cr investment

Arpwood Partners Fun I LLP will acquire a majority stake in SEWA Grih Rin Limited (Sitara), an affordable housing finance company, through an investment of Rs 680 crore. 

SEWA Grih Rin looks to raise a total of Rs 705 crore from Arpwood Partners and existing shareholders to grow its business. Investors including Abler Nordic, Oikocredit, RNT Associates, HDFC Bank, HDFC Life Insurance, Women's World Banking Asset Management, and Omidyar Network, will continue to invest in the company.

The deal is yet to be approved by the Reserve Bank of India.

“The capital infusion by Arpwood Partners will help enhance the capacity of the company to support women in realising their dream of owning a house of their own. Our unique operating model emphasizes assisting customers to formalise their collateral and helps in their social upliftment," said Renana Jhabvala, Chairwoman at Sitara. 

"We are thankful to our existing investors and lending partners for their continued support in Sitara’s growth journey. With this infusion from Arpwood Partners, we will redouble our efforts to touch 500,000+ lives in the next five years," she added.

Founded in 2015, Sitara aims to provide housing to under-served and low-income households, particularly women in the informal sector. The financial services company has an AUM of Rs 1,200 crore and boasts over 25,000 customers.

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“We believe that lending to self-employed customers with informal incomes is a structurally attractive opportunity. We are privileged to be partnering with SEWA and RNT Associates to further build and grow Sitara in its focus segment. We will work with current shareholders to grow the franchise profitably, expand the distribution network and invest in the team,” said an Arpwood Partners spokesperson.

Arpwood Partners Fund I LLP is a private equity fund that invests in mid-market franchises, driven by strategic clarity, empowering management teams, and operational excellence. It promoted SBFC Finance Ltd before exiting in May 2024.

DC Advisory India was the exclusive advisor for the transaction while Trilegal provided legal advice to Sitara and existing shareholders. Vertices Partners advised Abler Nordic and Oikocredit, and Anagram Partners advised Arpwood Partners.