Perhaps, looking at why HDFC bought GRUH way back will give some idea I guess. When HDFC did that, GRUH was a miniscule company but GRUH is specifically targeting a niche - that is, the non-salaried & low income class, which something would have been difficult for HDFC to do on their own - as their employees are more tuned towards salaried / high income segment. In a similar way, perhaps HDFC is looking at Canfin Homes to cater to the affordable housing market in the MIG-1/2 segment, where the income of the buyers is much less than that of a typical HDFC customer and higher than that of a typical GRUH customer.
Just my opinion…
But keeping asides the valuation part, initially almost 12 entities met with Canara bank / Canfin Management in January when Canara bank formally started the sale process. Even Kotak Mahindra bank was interested, so I guess the company looked attractive from business and growth perspective. And there were almost 8 big PE players as well - including Blackstone, which is primarily into real estate (commercial though) market deals.
So, the segment looks very attractive perhaps, without which obviously such interest woulnd’t have been seen. But I guess valuations kept few of them away in the initial phase. Now there seems to be around 5 to 6 players interested (as per comments from Canara bank MD)