Brookfield arm Sagen picks up 31% stake in IMGC

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Brookfield Group-owned Sagen MI Canada has signed a definitive agreement to acquire a stake representing approximately 31% in The India Mortgage Guarantee Corporation (IMGC) in a primary funding round.

The investment marks another marquee investor coming onboard IMGC, whose shareholders include National Housing Bank, International Finance Corporation, Asian Development Bank and Enact Holdings, through its subsidiary. The proceeds will provide growth capital to the business and support the enhancement of operational and technological capabilities while maintaining a robust risk management framework, the company said in a statement.

This will be Sagen’s first investment in India, which has been operating in Canada for more than 27 years and is the largest private sector residential mortgage default insurer in the country. Sagen is owned by Brookfield Business Partners, a group entity of Brookfield Asset Management.

IMGC has provided guarantees of over 70,000 home loans amounting to more than Rs 15,000 crore through its partnership with 19 lenders, including leading banks and housing finance companies. It also has presence in the affordable housing segment. The corporation’s new business volume grew by more than 50% in FY22 and is expected to have a sustained CAGR of over 50% in the next three years.

Stuart Levings, president and CEO of Sagen, said, “We are excited to be making this investment in IMGC and look forward to supporting IMGC’s growth as they continue to help first-time homebuyers achieve their dream of homeownership.”

Mahesh Misra, CEO of IMGC, said the company looks forward to leverage Sagen’s global experience to drive innovation and transformation to deepen the mortgage guarantee market in India. “We are delighted by the trust placed in us to actively participate in our growth journey,” Misra said.

Bangalore-based Unitus Capital acted as the exclusive financial transaction advisor to IMGC. The proposed transaction will close after customary statutory and regulatory approvals.