Indiabulls Housing Finance in talks to raise Rs 1,675 crore via ECBs
Indiabulls Finance, one of the largest housing finance companies in the country, is in talks with investment bankers to raise $250 million (about Rs 1650 crore) through external commercial borrowings as it plans to expand credit in the affordable housing sector.
The route is yet to be finalised as the mode of fund raising will be either through dollar bonds or foreign currency loan, said two people familiar with the matter.
Gagan Banga, vice chairman & MD of the company, confirmed the matter to ETRealty. “We are in talks with investment bankers to raise $250 million via external commercial borrowing as we have received in-principle approval from the RBI,” he told ETRealty.
“We are exploring both options — dollar bonds or offshore loan — and aim to use the proceeds in the affordable housing segment.”
Indiabulls Housing, which provides home loans, loan against property along with others, reported a 25% year-on-year rise in net profit at Rs 675.50 crore during the January-March quarter of financial year.
During the period, the company expanded loans at 31.5% y-o-y to Rs 68,683 crore, especially at a time when the industry credit grew at a much slower pace. In the past five years, loans have been growing at 28% CAGR (Compound Annual Growth Rate).
“Improvement in its funding profile and asset quality of LAP/builder book will be a key stock catalyst in our view,” research firm Nomura said in a report recommending ‘buy’ on Indiabulls shares with a target price at Rs 900. Shares fell more than 2% on Monday to close at Rs 697.70 on the BSE.
“The key highlight is that across vintages, delinquency from the LAP book has been less than 50bp and details regarding the full amortisation should provide investors with comfort,” the report said.