The ownership transition is expected to help reduce the cost of financing Indiabulls Housing Finance.
On December 9, the housing finance company sought to raise debt worth Rs 1,000 crore through non-convertible bonds with terms of between two and five years. Depending on the type of investor and the content, the effective yield of these bonds varied between 8.35 and 9.26%, according to information communicated by the company. This is about 350 basis points higher than the yields on outstanding government bonds of similar duration.
Currently, Indiabulls Housing Finance is rated AA by Crisil Ratings.
With new investors on board, along with improving leverage ratios and cost-income structures, Indiabulls Housing Finance hopes to improve its rating to AA +, Banga said.
It’s unclear exactly what Gehlaut’s exit will bring, according to a credit rating agency’s financial sector scoring manager. Since Gehlaut had sold his real estate businesses, concerns about conflicts of interest were already being addressed, the official said, speaking on condition of anonymity.
The presence of a promoter is an important indicator of support when needed. It is not clear whether these financial institutions will help Indiabulls Housing if there is a need for capital in the future, the official said.
Along with the reorganization, the company will resume growth but avoid the trap of rapid growth, Banga said. “Last year we managed to raise equity worth 5,000 crore rupees, which will help us a lot. In the future, we may consider another capital increase, or increase our size and our scale organically. “
The company is also developing its co-loan partnerships. He has partnered with seven lenders, including the Central Bank of India, Housing Development Finance Corp., Yes Bank Ltd. and Canara Bank for the co-lending activity.
These co-loan agreements are still new. In September, Indiabulls Housing Finance disbursed loans worth only Rs.325 crore under co-loan agreements. Through these partnerships, the company aims to shell out up to Rs 1,000 crore by October-December 2022, she said in an analyst presentation.
As of September 30, the housing lender had a loan portfolio of Rs 64,062 crore, with a gross non-performing asset ratio of 2.69%. The company seeks to close this fiscal year with assets under management of Rs 75,000 crore, which will rise to Rs 90,000 crore next year.