MICROCAPITAL BRIEF: In $112m Deal, ADB, BII, LeapFrog, Premji Invest in Shubham Housing Development Finance of India as Elevar, Motilal Oswal Private Equity Exit

The multilateral Asian Development Bank (ADB), the UK government’s British International Investment (BII), UK-based LeapFrog Investments and India’s Premji Invest (PI) – via its PI Opportunities Fund – recently announced they have led an investment in the India’s Shubham Housing Development Finance in local currency totalling the equivalent of USD 112 million. The four investors disbursed USD 78 million to Shubham as primary capital to support the company’s expansion of technology-based lending to underbanked consumers. Additionally, LeapFrog and PI acquired the stake in Shubham held by Elevar Equity, which has offices in India, Mexico and the US, and part of the stake held by India’s Motilal Oswal Private Equity (MOPE).

Founded in 2010, Shubham is headquartered in the city of Gurgaon. The company’s mission is to deliver “housing loans and finance solutions to families with informal incomes through new age credit programs which do not require individuals to provide any income proof on paper.” As of July 2022, Shubham operates around 100 branches in nine states of India. During the fiscal year 2022, it reports having generated total income of INR 3.5 billion (USD 44 million) while disbursing INR 10.0 billion (USD 125 million) in loans.

Started in 1966, ADB is a development finance institution headquartered in the Philippines. Its mission is to help its 68 member countries reduce poverty and otherwise improve the quality of life of Asia’s citizens. During 2021, ADB issued commitments of USD 23 billion, ending the year with total assets of USD 93 billion.

BII, established in 1948 and formerly known as the Commonwealth Development Corporation (CDC) Group, issues debt, equity and indirect investments with the aim of fostering growth in “sustainable” businesses to raise living standards in Africa, Asia and the Caribbean. The institution reports total assets of GBP 7.5 billion (USD 9.0 billion) as of June 2022.

Elevar is a venture capital firm investing in “business models that are out to turbocharge the lives of low-income households in emerging markets” particularly in the agriculture, education and healthcare sectors. Elevar reported having deployed USD 24 million during 2021.

LeapFrog, which was founded in 2007, invests in providers of banking services, finance, insurance and pensions as well as medical diagnostics, drugs and other healthcare products. As of 2021, its investees serve 212 million people, of whom 80 percent have low incomes. The firm has garnered approximately USD 2 billion in investor commitments since its inception.

MOPE was founded in 2006 as a mid-market equity investor. As of 2021, it manages approximately USD 900 million in assets and has founded three growth capital funds and four real estate funds.

Premji Invest is an investment office of India’s Premji family. It reportedly holds total assets of USD 3 billion as of July 2022.

By Saulius Simonas Ramanauskas, Research Associate

Sources and Additional Resources

LeapFrog press release
https://leapfroginvest.com/press-releases/leapfrog-investments-joins-bii-adb-premji-invest-in-us112m-funding-round-for-indias-shubham

Shubham homepage
https://shubham.co

ADB homepage
https://www.adb.org

BII homepage
https://www.bii.co.uk

Elevar Equity homepage
https://elevarequity.com

LeapFrog homepage
https://leapfroginvest.com

MOPE homepage
https://www.motilaloswal.com

Previous MicroCapital brief on Shubham
https://www.microcapital.org/microcapital-brief-accions-frontier-investments-saama-capital-invest-4m-in-equity-in-shubham-housing-development-finance-of-india

Previous MicroCapital brief on ADB
https://www.microcapital.org/microcapital-brief-adb-lends-15m-to-kmf-to-boost-financial-inclusion-for-msmes-post-covid-growth-in-kazakhstan