Poonawalla may buy Micro Housing Fin
MUMBAI: Billionaire Adar Poonawalla, chief executive officer (CEO) of the world’s largest vaccine maker Serum Institute of India Ltd, is in talks to acquire Mumbai-based Micro Housing Finance Corp. Ltd (MHFC), as he seeks to enter the financial services space, two people aware of the development said.
“The due diligence of Micro Housing is underway and the deal may be signed at a size of ₹300 crore,” said one of the two persons, both of whom spoke on condition of anonymity because the talks are private.
Poonawalla, 36, whose father Cyrus founded Serum Institute of India in 1966, refused to comment on MHFC or any other specific acquisition.
Mails sent to Rajnish Dhall, managing director at MHFC, did not elicit any response.
Poonawalla confirmed his interest in the financial services business, which he wants to build through acquisitions.
He has plans to enter housing finance first and expand to other areas such as consumer lending and vehicle financing.
“We plan to build a loan book of ₹8,000-10,000 crore through multiple buyouts and plan to pump in ₹4,000-5,000 crore for the acquisitions,” he said. “We do not want to begin from scratch and we are looking for firms with good prac- tices and large loan books. However, we are really concerned on the high valuations of the existing NBFCs (non-banking financial companies) in India.”
Internal accruals will fund the acquisitions, he said, but didn’t rule out the possibility of seeking private equity funding at a later stage. The group could have entered the financial services space five years ago, he said, but expanding the vaccine business globally delayed the move.
“We have been expanding our vaccine manufacturing business through inorganic growth route and keep investing for acquisitions, causing a delay in entering into the NBFC space in India,” said Poonawalla, who found a place in last year’s Forbes Asia’s annual Heroes of Philanthropy list, which included 40 philanthropists from 13 countries in the Asia-Pacific region.
Serum Institute of India, the world’s largest vaccine maker by number of doses produced and sold, acquired a defunct unit of Czech Republic-based injectable polio doses maker Nanotherapeutics Inc. for €72 million (₹521 crore) in April. The institute has invested close to ₹1,500 crore in a new greenfield project in Pune, a flu vaccine manufacturing unit to cater to European and US markets. Serum Institute supplies vaccines including those for diphtheria, tetanus, H1B, BCG, r-Hepatitis B, measles and mumps to 147 countries.
MHFC, which focuses on providing housing loans to individuals in the low-income group, had a loan book of ₹317 crore as of March 31, 2017. MHFC offers loans in the ₹5 lakh range against the security of the house being bought by a borrower. It has tieups with builders in the affordable housing space who will sell flats at a final price of ₹5-6 lakh.