HDFC Capital raises USD 376 million for a fund for affordable housing

HDFC Capital, the real estate private equity arm of HDFC Group, announced the initial closing of its third fund's second scheme on Monday, raising USD 376 million.

The new fund raising is the third by HDFC Capital's affordable real estate fund (H-Care 3), and the principal investor in the H-Care schemes is an Abu Dhabi Investment Authority (ADIA) wholly-owned subsidiary, according to a statement from HDFC.

Since its inception in 2016, the fund has amassed a USD 3.1 billion funding platform through its many schemes, making it one of the world's largest private finance platforms focused on the creation of affordable housing.

The fund will provide long-term, flexible finance for affordable and middle-income housing developments throughout their life cycle, including early-stage funding. It will also invest in companies involved in the affordable housing ecosystem, such as construction technology, fintech, and sustainability-tech.

HDFC Capital aims to fund tens of thousands of affordable houses through a combination of financing, partnerships, and technology, with a focus on sustainability.

While HDFC is the fund's sponsor, HDFC Capital is the plans' investment manager, according to HDFC Capital managing director Vipul Roongta.

HDFC Capital was a pioneer in investing in low- and middle-income housing projects. HDFC Capital is well on its approach to achieving its medium-term target of funding 1 million affordable houses in the country, according to HDFC chairman Deepak Parekh, with the help of prominent global investors such as ADIA and relationships with trustworthy developers.

"Our latest investment in the H-Care platform intends to promote its growth as it continues to fulfil the growing need in India for early-stage financing of housing projects," said Mohamed Al Qubaisi, ADIA's executive director, real estate department.