Indiabulls Housing Finance books Rs 500 crore of co-lending business

Indiabulls Housing Finance (IBHFL) has booked business worth Rs 500 crore through the co-lending model route in five months of the current financial year and expects to scale it up to Rs 300 crore in September.
 
At the start of FY22, the mortgage lender tweaked the business model to incrementally focus on the co-lending space by sharing risks and loan book with other banks or housing finance companies (HFCs).
 
At present, it has tie-ups with five financial sector players — HDFC, Canara Bank, Central Bank of India, YES Bank and RBL Bank.
 

Gagan Banga, vice-chairman of IBHFL, said the operating set up for the co-lending business has improved over the months. Also, the company will scale up business volume from the current month. It will add one more partnership for its loan against properties (LAP) business, taking the tally to six.

 
Loans are sourced by IBHFL under a joint credit policy, where 80 per cent of the loans are on the co-lending partner’s balance sheet and 20 per cent on IBHFL’s.
 
IBHFL earns spread on its portion of the loan and gets processing fee, origination fee and insurance income on the entire loan. The co-lending partner also pays an annual service fee.
 
IBHFL’s assets under management stood at Rs 65,438 crore at the end of June 2021, down from Rs 66,047 crore in March 2021 and Rs 73,065 crore in March 2020. Referring to securitisation or saledown of loans, Banga said it would do transactions worth Rs 4,000 crore in the first half ending September. It has already securitised Rs 2,500 crore in the first quarter ended June 2021 and would conclude deals for the balance in the second quarter.

 
Besides home loans, the HFC is also selling down its commercial real estate (CRE) loan book. It intends to sell CRE loans up to Rs 2,500 crore by the end of this month.
 
The HFC is in the market to raise up to Rs 1,000 crore through non-convertible debentures, being targeted at retail investors. Tranche I has a base issue size of Rs 200 crore with a green shoe option up to Rs 800 crore. The company is tapping retail investors to broad-base sources of funds.