ArthVeda Fund Management Company (AVFM) is a part of the financial services group whose flagship company is Dewan Housing Finance Limited (DHFL). DHFL is the second largest housing finance company in India and is listed on the Bombay Stock Exchange and National Stock Exchange. AVFM is in the business of asset management, with a focus on alternative investment funds covering asset classes such as real estate and traded markets.
DHFL and its subsidiaries are into the business of construction & mortgage finance from the last 30 years into affordable mid & low income housing in India (largely into Tier I, II and III cities), with an asset base of USD 25 bn, lending almost USD 300 mn per month across India, through its 500+ locations and 5000+ employees.
With 19 mn shortage of urban housing units in India, requiring ~USD 1.7 tn and the lack of construction & mortgage finance into the affordable mid & low income housing; Indian government has recently relaxed the FDI guidelines to attract foreign capital into the affordable housing (smaller projects with shorter duration & faster turnaround). Not only that, it has also relaxed the way foreign capital can flow into India by allowing direct investments into SPVs in India and still get the same tax benefits. This is to support Indian Government’s flagship program of “Housing For All by 2022”.
By virtue of being into affordable mid & low income housing finance for 30 years, DHFL & AVFM caters to 63% of this total market, which would need ~ USD 1 tn of funding by 2022. AVFM has envisioned this much earlier in 2006 when it launched its first domestic fund in India and the second fund in 2012, providing capital to the affordable mid & low income housing in India. First fund is completely exited and the second is in the exit mode with 30%+ IRRs for average 3 years of investments. These funds are ranked by EY as #1 and 3 respectively in the competitive space in India.
AVFM & DHFL is very uniquely positioned to capture this huge size of opportunity due to its long pedigree in this segment and with complete backward integration of construction & mortgage financing. And now with the relaxation of FDI norms, AVFM qualifies to raise international capital for smaller projects with shorter duration & faster turnaround (low land to sales value) and in turn provides flexibility to structure be-spoke customized solutions to the investors. By this AVFM is raising capital to support Indian government’s mission of Housing for All by 2022 and create low risk-high return investment opportunities for investors into this segment in India.