The National Housing Bank, the regulator of housing finance companies, is planning to sell its 12.5 per cent stake in Mahindra Rural Housing Finance, the Economic Times reported.

“Either Mahindra Finance or private equity investors will buy NHB’s stake,” the report said. “NHB is looking to sell its stake in the rural housing finance company of Mahindra.”

NHB is keen on reducing its role as an equity investor as it focuses on being a regulator whose mandate goes beyond just refinancing and helping mortgage firms with equity.

Mahindra & Mahindra Financial Services (MMFSL), a non-finance banking company, owns 87.50 per cent stake in Mahindra Rural Housing Finance (MRHFL), while National Housing Bank owns the remaining.

MRHFL is focused on customers in villages with an average annual household income of less than Rs 150,000.

In 2016-17, about 172,000 families received home loans from MRHFL, adding to the company’s client base of about 388,000 families as on March 31, 2016.

In the recent Union budget, the government had announced that NHB’s stake held by the RBI will be transferred to the government. NHB will be aligned to the government’s vision on affordable housing.

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