The International Finance Corp. provided $150 million in anchor funding for HDFC Capital Advisors, the real estate private equity arm of Indian housing finance group Housing Development Finance Corporation.
The anchor investment is intended to mobilize an additional $850 million from institutional investors and family offices for the H-DREAM Fund, short for HDFC Capital Development of Real Estate Affordable and Mid-Income Fund.
One of the first private credit funds to focus on middle income sustainable housing in India, H-DREAM has so far gathered $350 million in commitments.
The fund will “integrate financing, facilitate energy, water and material efficiency, along with innovative technology-based solutions in housing development,” explained HDFC Capital’s Vipul Roongta.
Catalytic capital
IFC was an early investor when HDFC was set up in 1978 as India’s first housing finance company. It sold its stake in 1994. The multilateral has been a repeat investor in HDFC, including a $500 million loan for green and affordable housing. HDFC’s private bank has 8,700 branches, mainly in rural and semi-urban areas. The new fund will target large and small cities across India.
“By leveraging market-based solutions and channeling institutional capital to underserved markets, this initiative will broaden access to housing finance, create opportunities for smaller developers, and strengthen and diversify the housing value chain,” said IFC’s Carsten Mueller.
