SUMMARY
The Sale Of HDFC Developers And HDFC Realty to Quikr Will Be An-Stock Deal
Online classifieds platform Quikr India has bought two subsidiaries of mortgage lender Housing Development Finance Corp. Ltd (HDFC) focusing on real estate brokerage and online property, namely HDFC Realty Ltd and HDFC Developers Ltd for a total of $54.8 Mn (INR 350 Cr).
HDFC Realty Ltd operates the brokerage business, while HDFC Developers Ltd owns the HDFC RED platform for online real estate classifieds. In a regulatory filing, HDFC stated that this is an all-stock deal, with HDFC taking a minority stake in Quikr India.
Renu Sud Karnad, Managing Director of HDFC said, “The future of real estate is digital, and Quikr has built a robust technology platform for consumers with products for developers and brokers who stand to benefit in the post-RERA (Real Estate Regulation and Development Act) regime. We hope to derive value from Quikr’s diversified customer base while offering our strength in the real estate sector.”
HDFC Realty is offline brokerage business with a presence in residential and commercial properties as well as consulting and valuation services. It has a 300 member in-house sales team and 7,000 strong nationwide broker network. HDFC Developers runs the HDFC RED platform. RED is an online real estate classifieds platform with 7,000 project listings on its platform. It generates traffic of over 80,000 unique visitors per month.
Kotak Investment Banking acted as the exclusive financial advisor to HDFC on this transaction while Avendus Capital was the exclusive financial advisor to Quikr.
A Quick Look At Quikr And Its Acquisitions In The Year
This marks the second-biggest acquisition yet by Quikr in the online real estate after it acquired online realty portal CommonFloor in a stock-and-cash deal for $200 Mn in January 2016. In the same space, Quikr then went on to acquire Bengaluru-based home rental marketplace Grabhouse. Prior to that in 2015, it had acquired Indian Realty Exchange, a mobile-first aggregator of real-estate agents, and in the same year, had also acquired real estate portal Realty Compass.
Pranay Chulet, founder and CEO of Quikr said, “We see great synergies between Quikr and HDFC as we start working together to bring a seamless online to the offline platform to developers and consumers.”
Founded by Pranay Chulet and Jiby Thomas in 2008, Quikr claims to have a user base of over 30 Mn per month. It is present in 1,000 cities in India and operates across 14 classifieds businesses including mobile phones, household goods, cars, real estate, jobs, services, and education. Till date, Quikr has received $350 Mn from investors like Kinnevik, Tiger Global Management, Matrix Partners India and Warburg Pincus.
Since its launch as a classified portal, Quikr has extended its verticals slowly and steadily in domains such as home rental, beauty services as well as online recruitment. This year it acquired blue collar jobs startup Babajob Services to strengthen its position in the blue collar jobs segment. This was preceded by the acquisition of on-demand home services startup Zimmber in an all-stock deal valued at about $10 Mn in the month of May this year.
Last year, it also acquired Grabhouse, Stepni, ZapLuk, Salosa, StayGlad, and Hiree. Also, the company got a 13% hike in its valuation from one of its investors, Swedish firm Kinnevik AB last October. In its latest quarterly report, the Swedish investment firm valued its 18% stake in Quikr at $265 Mn, increasing the unicorn’s total valuation to $1.47 Bn.
The online classified platform Quikr will soon also be rolling out on-demand grocery and food delivery service. Quikr plans to make this foray by partnering with neighbourhood stores and restaurants from where customers can order products ranging from grocery to food items.
As per reports, the Indian real estate market is expected to touch $180 Bn by 2020. By 2030, India is expected to be the third largest real estate market in the world with the sector contributing to over 15% of the national gross domestic product. Earlier this year, News Corp-backed realty portal PropTiger acquired Housing.com. With this acquisition of HDFC Realty and HDFC Developers, Quikr will look to strengthen its reach in the online real estate space where it competes with 99acres.com, Magicbricks.com, and PropTiger.
