The Unit Trust of India (UTI) and IFCI Ltd have been removed from the list of promoters of LIC Housing Finance Ltd (LICHF) and reclassified as financial institutional investors in the company. As a result, the housing company now has only one promoter, the insurance behemoth Life Insurance Corporation.
The stake held by parent Life Insurance Corporation in the company as on September stands at 38.5 per cent, down from 64.55 per cent in June this year.
UTI and IFCI held 12.03 per cent and 11.59 per cent, respectively. With both UTI and IFCI facing financial problems, market sources said the reclassification will enable them to offload their stake in LICHF.
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Phone calls to both institutions were not returned. The company secretary of LICHF refused to comment on the reclassification.
UTI has in fact already reduced its stake in LICHF. It held 12.03 per cent in June and has reduced its holding in LHF to 11.9 in September. The LICHF share in the market was ruling at Rs 72.
The company is also reconciling its accounts as per the US GMP. This credibility-strengthening initiative is expected to translate into lower cost international funds. Besides, the company expects to raise debt through the low cost market route over the foreseeable future.
On the business front, LICHF has targeted disbursals of Rs 2,500 crore by the end of the fiscal, while its outstanding mortgage portfolio is likely to cross Rs. 8,000 crore. It has initiated efforts to reduce interest costs on existing liabilities and expects its spreads to remain in the range of 1.8 per cent to 1.9 per cent.