Indiabulls Housing Finance to raise Rs 12,000 crore via bonds
MUMBAI: Indiabulls Housing Finance which on Monday reported a 22.6% year-on-year rise in net profit for the quarter ended 31 March, is looking to aggressively expand its bond borrowing programme.
The company which is targeting a total fund raising of Rs 18,000 crore in this fiscal is looking to fund 70% of that requirement only through bonds.
“We will grow by around Rs 18,000 crore of which 70% we will fund ourselves through bonds,” Gagan Banga, MD, Indiabulls Housing Finance told ET in an interview. “We will issue around Rs 12,000 crore of bonds and the balance Rs 6000 crore we will fund by a combination of ECBs, portfolio sell downs and bank term loans.”
The housing finance company is looking to raise Rs 1500 crore through external commercial borrowings and a similar amount through bank borrowings. It will raise nearly Rs 3000 crore through portfolio sell downs on net basis.
Acceleration of the bond borrowing programme is expected to further reduce costs for the company, which is also one of the beneficiaries of the new marginal cost of fund regime. 49% of the company’s balance sheet is currently bank financed.
Indiabulls Finance reported a net profit of Rs.675.5 crore for the January-March period and saw its total income from operations rise 28% YoY at Rs.2,400.87 crore. Its net interest income (NII), or the difference between interest earned on loans and that paid for funds, stood at Rs.1,116 crore during the fourth quarter, higher than the Rs.971 crore reported in the same period a year ago.
The company is also looking to expand its current home loan portfolio. “Our emphasis is to increase the home loans on our book which currently at are about 52% to 60%,” Banga added. “We grew the book at about 30% in FY16 and aim to grow the book between 25-30% and profits between 20-25% in FY17.”
Total 70% of the total home loan portfolio of the housing finance company qualifies under affordable housing segment.