 "Repco Home Finance plans to raise $40 million from IFC")
Repco Home Finance (RHFL) plans to raise Rs 268.85 crore (around $40 million) from International Finance Corporation.
The investment involves an investment by IFC's own account of up to Rs 265.85 crore (equivalent to US$40 million) in NCDs.
The investment would provide financing to RHFL for affordable housing loans to individuals in India. The project is expected to support RHFL to increase its reach and penetration in the affordable housing finance segments, especially in the low Tier II and Tier III cities in states outside of South India, said World Bank's investment arm IFC.
IFC's investment will provide comfort to other potential lenders and investors in providing debt to the company and also to others operating in affordable housing segment.
RHFL commenced operations in 2000 and is a public company. The Company was promoted by Repco Bank, a Multi State Cooperative Society, which continues to own 37.14% of RHFL, whilst the balance is held by domestic and foreign investors.
As of April 2015, the company is said to be operating through 106 branches and 36 satellite centres in Tamil Nadu, Andhra Pradesh, Telangana, Jharkhand, Kerala, Karnataka, Maharashtra, Madhya Pradesh, Gujarat, Odisha, West Bengal and Puducherry. It is focused on providing access to housing finance to low income borrowers, specifically those employed in the informal sector such as self-employed micro-entrepreneurs and un-organized sector salaried workers.
IFC debt will help diversify the funding profile of the company, which is currently largely dependent on banks and NHB for their funding needs. The NCD's will also provide RHFL with long term debt of 7 years which is also not readily available from the market.
