VBHF has a total
asset base of Rs 200 crore and has a home loan customer
base of approximately 7,500, with 98 per cent of this
concentrated in the retail segment.
on the occasion, DHFL managing director Kapil Wadhawan
said the acquisition is a step towards growth for a dominant
housing finance company like DHFL and will go a long way
in further improving its operational capability by size,
thereby improving its competitive edge in the housing
The decision has
been facilitated by VBHFs good asset quality and
concentration on retail customers which is in concurrence
with DHFLs objective of delivering single-window
comprehensive financial and advisory assistance to its
customers, he said.
established a niche in the southern part of the country
with 28 per cent of its total home loan assets, originating
from these markets. Since VBHF also has a strong presence
in south, this acquisition will help DHFL further consolidate
and add synergy to increase its penetration in these niche
markets, Wadhawan added.
Commenting on the
transaction, ING Vysya president V Raghunathan said: The
housing finance arm was set up as an independent entity
to take advantage of the beneficial operating and regulatory
environment for housing finance companies at that time.
With the changes in regulatory environment and the increasing
trend towards securitisation of housing loans, there was
little synergy for the bank to have a separate company
exclusively for housing loans. As such, the bank was exploring
various restructuring opportunities for VBHF. We have
now got an acceptable offer from DHFL and we have decided
to exit VBHF.
The due diligence
of the transaction was carried out by PricewaterhouseCoopers
and Nishith Desai and Associates. Rabo India Finance Pvt
Ltd acted as advisors for DHFL in the transaction.
DHFL, in the meantime,
to provide total financial solutions to its customers,
has ventured into distribution of insurance products in
the life segment. DHFL has entered into an agreement with
Birla Sun Life Insurance Company.
Also, to provide
better value-added services to home loan seekers, a new
entity, DHFL Property Services, has been formed to assist
homebuyers to identify good homes across Mumbai, Thane,
Navi Mumbai, Pune and Bangalore. This service is provided
free of cost to homebuyers.
growth can be complemented by the fact that its disbursements
rose by almost 100 per cent during the year ended 30 September
2002 amounting to Rs 195 crore compared to disbursements
of Rs 103 crore for the corresponding period in the previous