Indiabulls Housing Finance zooms 9% on dividend proposal, fund raising plan

The Board has approved to raise up to Rs 35,000 crore via non-convertible debentures

Shares of Indiabulls Housing Finance jumped as much as 9.4 per cent to Rs 139.6 apiece on the BSE in Friday's intra-day trade after the Board of Directors recommended a final dividend of Rs 1.25 per share. 

At 1:45 PM, the stock was ruling 7.6 per cent higher at Rs 137.2 per share as against 0.56 per cent dip in the benchmark S&P BSE Sensex. A combined 44.92 million shares have, thus far, changed hands on the BSE and NSE on the counter. 

The Board of Directors of Indiabulls Housing Finance Limited, at its meeting held on July 28, 2023, has recommended a final dividend of Rs 1.25 per equity share translating to 62.5 per cent on face value of Rs 2 each for the financial year ended March 31, 2023, subject to approval of members at the ensuing Annual General Meeting.

 

"The company is emerging from a phase of consolidation over the last few years. As the company gets back on the path of growth, the Board has resumed payment of dividends to shareholders. The company is also very well capitalised with capital adequacy in excess of 23 per cent on standalone basis and 31 per cent on consolidated basis as at the end of March 2023," the comany said in its statement.

It added: In the past, the company has had a consistent dividend paying track record. As business has now stabilised and the company gets back on the path of growth, subject to regulatory limits, the company aims to resume consistent payment of dividends. It is the company’s goal to deliver good returns to shareholders both on RoE and on dividends.

Separately, the Board also approved to raise funds through issue of NCDs and/or Bonds, not in the nature of equity shares, up to Rs 35,000 crore in one or more tranches, on private placement basis, till one year post receipt of shareholders' authorisation in the ensuing AGM. 

Over the last three months, the stock of the housing financier has zoomed 18.5 per cent as against 8.4 per cent surge in the benchmark Sensex index. The S&P BSE Financial Services, too, added 8.2 per cent during the period, BSE data shows. 

Introduction of the credit-linked subsidy scheme (CLSS) by the government in 2015 improved affordability of home loans for economically weaker section (EWS) and low income group (LIG) population groups. This is reflected in CLSS-linked loans to the two groups accounting for 4 per cent each of total home loan disbursements in FY21 and FY22. Though the scheme was discontinued in FY22, demand for affordable home loans remained strong in both FY22 and FY23. Asset under management (AUM) growth for housing finance companies (HFCs) was at 13 per cent year-on-year (YoY) in FY22 and 14 per cent in FY23 despite increasing subsidy payouts under CLSS, which remained at 4 per cent of total HFC disbursements in FY22.

"While affordable housing finance companies (AHFCs) continued to deliver robust growth in FY23, lower subsidy-linked payouts in FY24E are likely to ensure FY24E AUM growth outpacing FY23," said analysts at ICICI Securities in a July report.

Financially, Indiabulls Housing Finance posted a 14 per cent decline in consolidated net profit to Rs 263 crore for the March quarter of FY23 (Q4FY23). Its revenue from operation fell to Rs 2,077 crore for the quarter as compared to Rs 2,191 crore in the year-ago period.

The company's gross non-performing assets (NPAs) ratio had improved to 2.85 per cent at the end of March 2023 against 3.30 per cent a year ago. Net NPA ratio, too, improved to 1.89 per cent from 2.24 per cent relative to the previous year.

The Board is yet to declare date for the June quarter (Q1FY24) results announcement.