The transaction will maximize the shareholders' value in the long term as Poonawalla Fincorp focusses on building a Tech-Led and Digital-First financial services company, with leadership in consumer & MSME financing.

"Poonawalla Fincorp will continue to work towards achieving its stated Vision 2025 at a standalone level with focus on growth, asset quality and profitability,” the company said in a statement.

The value unlocking of the housing finance subsidiary was one of the stated objectives in the company's Vision 2025 statement. In line with that, company started the process by looking at part dilution and price discovery. The company received tremendous response with proposals including those for a full stake buyout.

Post an exhaustive strategic review of the proposals, the board decided that complete stake sale would be in the best interest of both the entities and all stakeholders considering the different customer segments, geographies, and distribution model. This transaction will help focus on maximizing value creation by optimizing resource allocation and increasing management focus on their respective business needs.

With the rapidly growing digital eco-system, Poonawalla Fincorp (standalone) sees tremendous growth opportunities in its current and proposed line of businesses. The digitization further complements innovation in products, customer experience and engagement. It will continue to build a strong retail franchise in consumer and MSME financing.

Adar Poonawalla, Chairman, Poonawalla Fincorp, said: “Financial services business is of strategic importance to us, and we stay fully committed towards creating value for all our stakeholders and building Poonawalla Fincorp into a new age financial services player of choice.

Poonawalla Fincorp will continue to focus on its growth coming from Tech-Led businesses and a branch-lite model while Poonawalla Housing will follow its own differentiated path as a completely independent business. As a global leading investment firm, TPGs experience in building and supporting leading financial services companies will add greater value to Poonawalla Housing.”

Poonawalla Fincorp is a Cyrus Poonawalla group promoted non-deposit taking systemically important non-banking finance company (ND-SI-NBFC), registered with the Reserve Bank of India (RBI).

The company's consolidated net profit soared 70.8% to Rs 163.12 crore on 27.1% jump in total income to Rs 654.89 crore in Q2 FY23 over Q1 FY22.

The scrip fell 2.14% to currently trade at Rs 295.65 on the BSE.