Sundaram Home Finance ties up with new JV partner - Views on News from Equitymaster

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Sundaram Home Finance ties up with new JV partner

Mar 6, 2000

Sundaram Home Finance (SHF), a subsidiary of Sundaram Finance has taken on a new joint venture partner, the Netherlands based company Financier Maatschappij Voor Ontwikke-Hlingslanden NV. The new partner is expected to pick up 15% stake in the company and take up the total foreign holding to 35%. SHF provides long term housing finance to individuals for construction or purchase of any house in India for residential purposes. SHF has an existing tie-up with International Finance Corporation which holds a 20% stake in the company. Out of the total paid up capital of the company of Rs 500 m, IFC has invested Rs 100 m in the company and Rs 75 m will be brought in by the Netherlands based company. Sundaram Finance holds a 65% stake in this housing finance subsidiary.

SHF has entered into a tie-up with United India Insurance Company for providing insurance cover for housing loans at a low premium. The company plans to leverage on the strong database & extensive branch network of Sundaram Finance. Of Sundaram Finance's 95 branches, 57 branches are located in South India.

With these tie-ups SHF will be in a position financially as well as strategically to increase its presence in the growing housing finance market. It will face competition from the existing established players like HDFC, LIC Housing and GIC Housing. The housing finance market has been growing with many commercial banks also lending towards housing loans.

As Sundaram Finance the parent company has a very strong base in South India, SHF will encash on this presence by leveraging on this brand name.


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