Centrum Housing to acquire National Trust Housing biz in a cash deal


Centrum Housing Finance, an affordable housing finance subsidiary of the Centrum Group, is in an advanced stage of discussions to buy out the business of South India-based National Trust Housing Finance (Natrust).

The deal value could not be immediately ascertained, but the acquisition would be a cash deal, a person familiar with the matter said. The deal is likely to be signed very soon, perhaps in a day or two, the person said.

According to sources, Centrum Housing Finance will take over Natrust’s operations that would include branches, loan portfolio, employees and assets.

The acquirer had a portfolio of Rs 700 crore as of September while Natrust had its portfolio at Rs 300 crore.
The acquisition would provide Centrum Housing a stronger foothold in the southern states where it currently has a small presence. Natrust, a 25-year old company, is present in 17 locations across four states in South India.

“Promoters of Natrust wanted to exit the lending business as they have other interests and it also became difficult for smaller companies to raise capital in the post-Covid market. Maintaining adequate liquidity was also a challenge for them,” a person tracking the sector said.

Neither Natrust nor Centrum Housing responded to mails from ET seeking comments on the matter.

The Reserve Bank of India (RBI) in 2021 tightened the rules of the business for housing finance companies with more than Rs 100 crore assets size. “This will lead to more M&A activities in the sector,” another person said.

On the other hand, for Centrum Housing, which received Rs 200 crore equity investment from Morgan Stanley PE Asia in February 2020, “leveraging the capital and growing” has become imperative.

The mortgage lender commenced operations in 2017 and offers housing loans through a network of 70 branches across 10 India states – primarily in the north and in the west.

The acquisition, if it goes through, will be the fourth for Centrum Group in the last five years. The previous acquisitions during the period were FirstRand Bank India’s microfinance business, L&T Finance’s supply chain finance business and Altura Financial Services.

Besides housing finance, the Centrum Group has a wealth advisory business with an AUM of over Rs 35,000 crore. It also offers investment banking, stock broking and asset management services. Centrum recently ventured into banking with the launch of Unity Small Finance Bank.

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