Canfin Homes plans to come out with a Rs 100 crore mortgage based securities issue (MBS) by this year-end following the success of its pilot MBS issue.
The proposed MBS issue is part of the Rs 200 crore funds being raised from the financial institutions alone in the current year. The last pilot MBS issue had raised Rs 45 crore.
Another Rs 100 crore is being raised by Canfin Homes through deposits from the general public for tenures between one year to 7 years which will carry interest in the range of 9 per cent to 10.25 per cent.
Funds raised from the general public costs the least to Canfin Homes as it carries much lower interest as compared to funds raised from the financial institutions which cost around 11.5 per cent.
The average cost of funds raised from the general public cost Canfin Homes 10.5 while the lending on an average is at 12.5 per cent giving the housing finance company a spread of 2 per cent.
However, the last MBS issue of Canfin Homes carried interest of only 10.25 per cent, which is much lower as compared to the funds raised from National Housing Bank which was at 11.5 per cent.
"Our last MBS private placement issue which raised Rs 45 crore received a good response as LIC, UTI and several banks had subscribed to it. The MBS is raised by converting receivables out of housing loans and selling it to investors," G Umesh Shenoy, managing director of Canfin Homes said.
For the current year, Canfin Homes has set a target to sanction Rs 500 crore loans and disburse Rs 450 crore as against Rs 280 crore disbursed last year.
Canfin Homes has 43 branches in different parts of the country and plans to open 4 new offices during the current financial year.
The housing finance company plans to actively tie-up with builders and corporates to meet their housing finance needs and expand its lending base.
