Sundaram BNP to raise Rs 2,500 cr as part of FY16 fund raising plan

Sundaram BNP Paribas Home Finance, the home finance subsidiary of Sundaram Finance, is raising Rs 2,500 crore through a mix of debt and deposits as part of its fund raising plans for FY16. National Housing Bank (NHB) has sanctioned the company a funding of Rs 1,000 crore.

The current round of fund raising is to fund the future disbursement and financial commitments. “We are planning to raise Rs 2,500 crore by way of debt. We would also explore ECB if the rates and other terms are competitive,” Srinivas Acharya, MD, Sundaram BNP Paribas Home Finance said.

The company will also be raising Rs 1,000 crore from NHB this year and this would be used towards rural and urban housing financing and other normal refinance scheme. As NHB funding has an attractive interest rate of 7.2 per cent for rural housing segment, the company finds the segment attractive. The company can have a spread of 2.5 per cent if NHB funds are used for rural segment.

“Rural Housing will be a focus area. Our current AUM is around Rs 70 crore. The company is looking at garnering business of Rs 100 crore from the rural housing segment this year, taking it to Rs 170 crore,” he said.

The company also cut its lending rates by 20 basis points to 9.95 per cent earlier this month. ‘The Union Government’s thrust on housing augurs well for the Housing Finance sector. We expect more appetite from affordable HFCs for their onward lending to affordable housing segment. The Smart Cities project announced yesterday could be a trigger to aid the recovery in the real estate sector that has been sluggish for the last couple of years,’ Acharya said.

Sundaram Home Finance, which added business close to Rs 25 crore through acquisition of home loan portfolios of Housing Finance Companies (HFCs) and through Securitisation in the second half of last year, will continue to explore opportunities in the area of acquiring home loan portfolios of HFCs. The company believes there is potential to acquire home loan portfolio of HFCs to the tune of around Rs 100 crore this year.

Loans under Management stood at Rs 7,486 crore as on 31st March 2015. Home loan disbursements for FY15 stood at Rs 1,939 crore as against Rs 2,493 crore registered in the previous year.