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LIC Housing Finance Ltd, the third largest housing finance company in the country, is planning to raise around Rs 28,000 crore to support its loan disbursement, during the current fiscal year. It is also expected to start a seperate arm to cater the home loan market in North Eastern States in a year, said V K Sharma, managing director & CEO of LIC Housing Finance Ltd.
Speaking to the reporters here after inaugurating the 16th edition of the company's property fair Ungal Illam (Your House) here, Sharma said, “We will be raising around Rs 28,000 crore for the year and we are confident to raise it easily since we have AAA+ rating from the rating agencies.”
He added that 30% of the funds would be raised through bank borrowings whiel the rest of the 70% would be from Non Convertible Debuntures (NCDs).
The home loan company has already raised Rs 6,000 crore out of this is the first quarter of the fiscal, through both these instruments. Last year, the company has raised around Rs 23,000 crore to support its disbursements, added Sharma.
The company has an asset base of Rs 80,000 crore and in the fiscal year 2012-13, the profit was over Rs 1000 crore. It has been catered to around 1.5 million customers and 93% of the loans were disbursed to the retail sector.
Elaborating the company's plans to set up a wholly owned subsidiary to offer its services to the North Eastern States, Sharma said that he is expecting to start the new arm in almost one years' time.
While the company has an exposure of around Rs 200 crore in this region, but is restricted to select city regions and not up to meeting the actual demand. Some of the local laws inlcuding land legislations and others has made the acquisition of new customers in this region. For instance, some of these States do not allow creation of a mortgage.
“We were even trying to tie up with some local players to serve the market, but this would be our wholly owned subsidiary,” said Sharma.
Commenting on the interest rates and the market scenario, he said that the company hopes to see the interest rates stabilised and if the interest rates are not coming down, it would affect the market. While there is adequate demand and supply of houses in the market, like Mumbai and Delhi, there is a slow down in sales due to the high prices, volatility in the economy and weaker Rupee.
The company is looking at acquiring more women customers through its product New Bhagyalakshmi, an extension of its product Bhagyalakshmi exclusively for women, which caters to the women as first purchasers. It has disbursed around Rs 5000 crore through Bhagyalakshmi scheme so far and is expecting lower delinquency levels for these schemes.
The gross NPA of the company is around Rs 400 crore out of the total Rs 80,000 crore loan book, he added.
It has disbursed retail home loans of around Rs 5,300 crore in the Southern region in the fiscal year ended March , with a 10.42% from the Rs 4,800 crore retail disbursement during the previous fiscal.
