LIC Housing Finance Ltd, the housing finance arm of life insurance major LIC of India, on Friday said, it is look-ing to invest Rs 200 crore in an urban real estate project this quarter from its proposed Rs 500 crore real estate venture capital fund.
“We will be closing our Rs 500 crore real estate venture capital fund very soon and we are in talks with several urban residential developers across the country. We will be for the first time taking equity in a real estate project. Till now, we were only lending to such projects and invest at least Rs 200 crore during the fourth quarter this fiscal,” LIC Housing Finance director and chief executive V K Sharma told Business Standard.
LIC HFL is a 50 per cent partner in the real estate VC fund along with its parent LIC of India. The companies have received all regulatory approvals for floating the VC fund, he said.
Commenting on the proposed plan to raise up to Rs 8,000 crore funds, he said, “It may not be possible to raise fresh funds in the last quarter as there is not much time left to take the necessary approvals. But, we will certainly raise in the first quarter of next fiscal.”
The housing finance company has already raised around Rs 15,000 crore till now and is short of another Rs 7,000 crore to Rs 8,000 crore for meeting its lending requirements. The company has so far extended a loan of Rs 15,000 crore out of its target of Rs 20,000 crore for the present fiscal. Another Rs 5,000 crore would be lent in the remaining months of the fourth quarter, he said, adding they were on course to achieve 20 per cent growth in lending for the present fiscal. “We are in talks with our parent to decide on which route to be taken to raise funds and how much to raise exactly,” Sharma said.
For 2012-13, Sharma said LIC HFL has set a target of achieving 20 per cent growth in lending at Rs 25,000 crore.
The company, which is holding its second property expo in Bangalore from January 6 to January 8, is looking at a business of Rs 200 crore, a rise of 150 per cent over last year. Over 50 top builders from Bangalore are showcasing their properties in the expo.
NRIs take keen interest in real estate
NRIs have started taking keen interest in the real estate sector back home following the significant appreciation of the dollar vis-a-vis the rupee, a top official of housing finance company said on Friday.
“NRIs have started taking keen interest due to the appreciation of the dollar. They have started converting the dollar into rupee,” Director and CEO of LIC Housing Finance Ltd, Vijay Kumar Sharma, told reporters here. NRI interest is “perceptible and visible,” he said, adding LICHFL’s Dubai and Kuwait offices (catering to NRIs investing back home) have “lot of enquiries and log-in” and “compared to last year, the growth (there) is 50-60 per cent”.
Sharma also said the Bangalore metro rail project would transform the real estate sector in this city in three years, similar to what happened in Delhi.
“Metro completely transformed the entire (real estate) profile. This is going to happen in Bangalore also in the next three years. I am sure about it,” he added. Referring to a just-released study, Sharma said the Bangalore real estate market is looking up again after two years, and demand has gone up.
LICHFL on Friday kicked off a three-day property expo here, with participation of more than 50 builders who are showcasing over 250 projects. The maximum processing fee for the visitors at the exhibition — Nimma Mane 2012 — is Rs 5,000 plus service tax, a “high rebate” as Sharma put it, adding, “normally, processing fee is 1 per cent of the total amount”.
