Nivara Home Finance Receives $10 Mn Funding From Baring PE India

Nivara Home Finance logo

Three points you will get to know in this article:

  • Nivara Home Finance offers small housing loans to micro-entrepreneurs and professionals.
  • Housing finance startup to use new funds for growth.
  • Nivara has INR 500 Cr AUM and 0.58% gross NPAs across 63 branches in five states as of February 2024.

Introduction to Nivara Home Finance

Nivara Home Finance is a housing finance startup that offers home financing solutions to customers in India. The company was founded in 2017 and is headquartered in Mumbai. Nivara Home Finance offers a variety of products, including self-construction loans, home construction loans, and home improvement loans. The company also offers pre-approval for home loans for homebuyers. Nivara Home Finance is regulated by the Reserve Bank of India and is a licensed private financial institution. The company’s lending practices are insured by the Deposit Insurance and Consumer Protection Corporation of India (DICCI).

Nivara's Strategic Partnership with Baring Private Equity India

Nivara Home Finance, a budding player in the housing finance sector, has recently secured a significant investment of $10 million (approximately INR 82.4 crores) in a funding round spearheaded by Baring Private Equity India, a prominent investment firm.

In a heartfelt statement, the company expressed its excitement about the infusion of funds, which it intends to employ towards fueling its ambitious expansion and growth strategies.

Emphasis on Underserved Market Segments

Established in 2015 by the trio of CV Rao, Sunil Rohokale, and Monik Koticha, Nivara stands out as a housing finance company dedicated to extending a helping hand to micro-entrepreneurs and salaried professionals. Their mission revolves around disbursing modest-sized housing loans ranging from INR 5 Lakhs to INR 7.5 Lakhs, thereby empowering individuals to realize their dreams of owning a home.

“Nivara is pleased to announce its partnership with Baring Private Equity India for its upcoming growth phase. We operate in an underserved market in Tier 2, 3, and 4 markets and have found a partner who aligns with our vision for this segment. This funding round will allow us to strengthen our position in the market and accelerate our growth plans,” stated Nivara’s co-founder and CEO, Rao.

Regarding the fundraising efforts, Debanshi Basu, Senior Principal at Baring PE India, commented that the affordable housing finance sector is set to experience substantial growth. Basu noted that Nivara’s emphasis on asset quality, dedication to underserved segments, and the management team’s experience, expertise, and strong governance practices will drive the company’s success in the long term.

Nivara's Operational Landscape and Financial Strength

The startup is currently running its operations across five states – Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, and Maharashtra – through a network of 63 branches. They proudly state that they’re managing assets worth INR 500 Crores and have maintained a remarkably low gross non-performing assets (GNPAs) rate of 0.58% as of February 2024.

What’s remarkable is that this startup has been completely self-funded until now. Its founders have invested a hefty sum of INR 100 Crores into the venture so far. Even more impressive, they’ve been turning a profit right from the start.

Discontent Among Stakeholders

The company is currently engaged in public disputes with its investors, who recently organized an extraordinary general meeting (EGM) in an attempt to remove Raveendran and his family members (wife and brother Riju Ravindran) from the board of directors. In addition, the edtech giant is being scrutinized by the Enforcement Directorate (ED) for suspected foreign exchange violations totaling INR 9,362 Cr.

Competitive Positioning and Industry Potential

The company faces competition from various sources, including startups like Basic Home Loan and Easiloans backed by, as well as established players like Indiabulls Housing Finance and India Home Loan. This development follows closely behind another home loan startup, Vridhi Home Finance, which recently secured INR 150 Cr in funding led by Elevation Capital.

In India, the housing finance sector remains largely untapped and has significant growth potential. A report by Mordor Intelligence indicates that the domestic home loan market is valued at $300 billion. Additionally, as per the SA team, the digital lending market in India is projected to grow from $270 billion in 2022 to $1.3 trillion by 2030, representing a compound annual growth rate of 22%.

Nivara Home Finance, with a recent infusion of $10 million from Baring Private Equity India, is set to strengthen its position in the housing finance sector and accelerate its growth plans. The company’s commitment to serving underserved market segments and its impressive financial stability, self-funded status, and profitable performance underline its resilience. Positioned amidst competitive forces, Nivara’s strategic partnership aligns with the untapped potential of the Indian housing finance and digital lending markets, projected for significant expansion in the coming years.

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