Information on the Target

Altum Credo ("Altum" or "the Company") is a prominent affordable housing finance company based in India, established in 2016 by Vikrant Bhagwat, Ganesh Rao, and Ashish Tewari. It has rapidly become one of the country's fastest-growing entities in its sector, operating a network of 30 branches across Maharashtra, Telangana, Tamil Nadu, Karnataka, Rajasthan, and Andhra Pradesh. Altum focuses primarily on serving economically weaker sections and low-income groups, a demographic that frequently faces obstacles in obtaining credit from traditional financial institutions.

The Company has recently secured a fresh equity investment of INR 50 crores (approximately US$ 6.7 million) from Amicus Capital, a growth fund. Existing investors Aavishkaar Capital and Mr. PS Pai & Family contributed an additional INR 19 crores (around US$ 2.5 million) each, culminating in a round total of INR 88 crores (about US$ 12 million). The proceeds from this fundraising are earmarked for bolstering Altum's technology platform and scaling its operations further.

Industry Overview in India

The Indian housing finance industry has witnessed significant growth propelled by a rising demand for affordable housing, particularly among the lower-income segments. The government’s initiatives, such as the Pradhan Mantri Awas Yojana (PMAY), have incentivized homeownership by facilitating access to credit, thus expanding the market. This trend is further nourished by a burgeoning young population, migrating towards urban areas, and a prevailing aspiration for home ownership among first-time buyers.

As per the National Housing Bank’s reports, the affordable housing sector is expected to maintain a robust growth trajectory, offering myriad opportunities for companies like Altum. Despite challenges such as regulatory constraints and potential market fluctuations, the long-term outlook remains promising due to favorable macroeconomic conditions and continuous governmental support.

The industry's structure is also evolving with the integration of technology, transforming traditional practices in origination, assessment, and monitoring of housing loans. Innovative financial solutions and digital platforms are assisting organizations in addressing the unique needs of low-income borrowers. This modernization enhances efficiency and streamlines services to a demographic traditionally underserved by mainstream finance.

Overall, the Indian housing finance landscape presents a fertile ground for growth, especially for companies that demonstrate agility and adaptability. With increasing investments and positive economic indicators, stakeholders across the dais of the housing market are positioned to reap substantial benefits.

The Rationale Behind the Deal

The key motivation for this investment round by Amicus Capital and existing investors stems from the recognition of Altum's potential in addressing the acute need for affordable housing finance in India. By enhancing its technological capabilities, Altum is strategically positioning itself to cater to a growing customer base within the underserved segments.

The funding will allow Altum to expand its operations in the six states where it currently operates, improving operational efficiencies and broadening its service offerings to first-time home buyers seeking affordable financing solutions. This aligns perfectly with Amicus and Aavishkaar's missions to support fast-growing enterprises that create meaningful impact.

Information about the Investor

Amicus Capital is a dedicated early growth fund based in India, founded by seasoned private equity professionals Sunil Theckath Vasudevan and Mahesh Parasuraman. With a focus on sectors where the investment team possesses deep expertise, including financial services, consumer products, healthcare, and technology, Amicus Capital manages its first fund of US$ 88 million (approximately INR 625 crores).

As Amicus Capital's eighth investment, the partnership with Altum reflects its strategic approach towards capitalizing on high-growth opportunities within the housing finance space, driven by robust operational systems and an adept management team. The firm aims to aid in scaling businesses post-validation of their models, thus driving significant category leadership.

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The investment in Altum Credo presents a compelling opportunity, particularly given the favorable dynamics within the Indian affordable housing finance market. With ample governmental support and increasing socio-economic aspirations, Altum is likely to experience significant growth as it aims to leverage technology to enhance its service delivery.

Moreover, Altum's commitment to improving its technological infrastructure positions it well within the competitive landscape. Investing in technology not only streamlines operations but also reduces friction in the loan approval process, which is crucial for attracting first-time home buyers from the economically weaker sections.

The management team at Altum has demonstrated resilience and adaptability in a fluctuating market, underpinned by their best-in-class portfolio quality. This aspect, combined with strategic funding and a clear growth vision, indicates that the company is poised for substantial scalability in the coming years.

Overall, partnering with Altum appears to be a judicious investment choice for Amicus Capital and Aavishkaar Capital, considering the significant growth trajectory in the affordable housing sector and Altum's strategic initiatives to harness that potential effectively.

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