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Buyout-focused private equity fund Arpwood Partners on Monday said it has acquired a majority stake in SEWA Grih Rin (Sitara) Ltd with an equity commitment of Rs 680 crore.

Sitara is an affordable housing finance company of the Self-Employed Women's Association (SEWA) Group.

The company said it has entered into an agreement with Arpwood Partners Fund and some existing shareholders to raise equity capital of Rs 705 crore for financing business growth.

Existing investors include Abler Nordic, Oikocredit, RNT Associates (investment entity sponsored by Ratan Tata), HDFC Bank, HDFC Life Insurance, Women’s World Banking Asset Management and Omidyar Network.

The deal is subject to approval by the Reserve Bank of India (RBI), the company said in a statement.

"The capital infusion by Arpwood Partners will help enhance the capacity to support women in realising their dream of owning a house of their own. With this infusion, we will redouble our efforts to touch more than 500,000 lives in the next five years," said Renana Jhabvala, Chairwoman at SEWA Grih Rin Limited (Sitara).

Sitara started its operations in 2015 as an affordable housing finance company for the under-served and low-income households in urban and peri-urban locations, with a special focus on enabling property ownership by women in the informal sector.

It operates through a network of 75 branches in nine states, and has an asset under management (AUM) of Rs 1,200 crore with over 25,000 customers.

"We believe that lending to self-employed customers with informal incomes is a structurally attractive opportunity. We will work with current shareholders to grow the franchise profitably, expand the distribution network and invest in the team," said Arpwood Partners’ spokesperson.