IIFL Home Finance looking to raise up to Rs 1,000 cr through bonds

The home loan provider to low- and middle-income customers has firmed up co-lending arrangements with ICICI Bank, Standard Chartered Bank and

to expand its loan portfolio.

At the end of March, its loan portfolio stood at Rs 14,439 crore. The asset under management, which includes off-balance sheet exposure by way of securitization, was at Rs 20,700 crore.

The lender, a subsidiary of , is likely to seek market regulator Securities & Exchange Board of India’s nod for the bond issue soon, people familiar with the matter said.

When contacted, IIFL Home Finance’s chief executive Monu Ratra said that the company is exploring various options for fund raising without sharing specific details.

Issuing non-convertible debentures is one of options for fundraising, besides external commercial borrowings. The fund raising is part of its Rs 5,000-crore annual borrowing programme that includes bank loans and securitization.

The company with a capital adequacy ratio of over 23% has no plans to raise equity this fiscal.taper

Ratra expects demand for home loans to rise if the number of coronavirus cases continue to taper off as seen in the past few weeks. “Impact of the second wave on livelihood is much higher than the first wave while the possibility of a third wave is another concern. But achieving 18% growth on a low base looks achievable, given the pent-up demand in the economy,” he said.

The lender will be relying on the co-lending arrangements to support business growth. “We expect this to gain momentum from next quarter. Although the tie-ups with banks have been taking shape since March, the second wave delayed the implementation,” Ratra said.

Under the co-lending model, non-banking finance companies become the single point of interface for the customers, while they need to have a minimum 20% share in a loan with the balance being provided by the partner bank.

“The large lenders do not occupy the affordable housing finance space thus creating opportunity for us. The amalgamation of the public sector banks also created space for us as these lenders were busy with system integration and management overlays,” Ratra said.