Advent in advanced talks to invest $300 million in Aditya Birla Housing Finance

Private equity major Advent International is learnt to be in advanced discussions to infuse around $300 million into Aditya Birla Housing Finance, according to people familiar with the matter. If concluded, this would mark one of the larger single-ticket private equity investments in India’s housing finance space in recent years.

The transaction is being structured as a primary capital infusion, in exchange of a minority stake, sources said. The capital is expected to be used to strengthen the balance sheet, improve capital adequacy and support loan book expansion, particularly as housing financiers prepare for the next phase of credit growth.

Aditya Birla Housing Finance is a wholly owned subsidiary of Aditya Birla Capital, which has been sharpening its focus on retail lending as a core growth engine. Within that strategy, housing finance plays a critical role, offering long-tenure, secured assets and relatively predictable cash flows compared with unsecured credit.

The proposed Advent investment comes at a time when housing finance companies (HFCs) are consciously building capital buffers. After a period of cautious lending post the pandemic, demand for home loans, especially in the affordable and mid-income segments, has remained resilient, driven by urbanisation, infrastructure-led development and policy support for housing.

At the same time, regulators and rating agencies have been emphasising capital adequacy and liability diversification, pushing lenders to rely less on short-term market borrowings and more on stable equity capital. A large PE cheque, therefore, not only fuels growth but also strengthens confidence among debt investors.

Aditya Birla Housing Finance has already been active on the funding front. In January 2025, it raised ₹830 crore from the International Finance Corporation (IFC) through non-convertible debentures, with proceeds earmarked largely for affordable housing and MSME-linked lending. Separately, the parent, Aditya Birla Capital, infused ₹249 crore into the subsidiary to support growth and improve leverage metrics, following earlier capital support as well.

Diversification of capital base

Against this backdrop, sources said Advent’s proposed investment would further diversify the capital base, reducing reliance on periodic parent infusions and debt issuances.

For Advent, the investment would signal continued conviction in India’s secured retail credit story, even as the firm has monetised parts of its earlier exposure to Aditya Birla Capital at the parent level. For Aditya Birla Housing Finance, the capital could provide the firepower needed to scale up lending, deepen presence in priority housing segments and navigate asset-quality cycles from a position of strength.

Both the companies did not immediately respond to CNBC-TV18's queries.