MUMBAI: is set to raise up to Rs 1,000 crore via a public issue of local bonds as the home financier is bracing up for loan demand in the coming quarters.
The retail sale of debt securities will open for subscription next Monday, the first such sale by the issuer after 2018. Those double-A rated securities will offer as much as 9.75 percent with seven-year and three-month maturity, sources said.
“We can see credit demand coming up with increasing vaccination drive,” Gagan Banga, managing director at Indiabulls Housing Finance told ET confirming the matter.
“A public issue of bonds helps strengthen our brand as we are bracing up for our next level of growth,” he said.
Indiabulls Housing Finance has set a target to disburse Rs 2,000 crore worth of home loans every month by end of this fiscal year. It is currently disbursing about Rs 800 crore every month.
Edelweiss Financial Services, IIFL Securities and Trust Investment are helping the borrowing to build the issue. IDBI Trusteeship has been appointed as the trustee of the proposed bonds.
The base size of the issue is pegged at Rs 200 crore with an option to retain subscriptions up to Rs 1,000 crore.
There are four categories of investors including qualified institutions, corporates, high net-worth individuals and retail individuals.
The first two categories are likely to form 40 percent of the total issue size leaving the rest 60 percent equally divided between individuals.
Two sets of bonds will be up for sale – secured and unsecured.
“For any yield-hungry investors it makes sense to invest as these papers are well above the junk category,” said a local arranger for the bond sale, who is not part of the fundraising exercise.
Interest rates may be offered in the range of 8.05-9.75 percent across two-, three-, five- and seven- (87 months precisely) year maturities.
Rating company CRISIL rated those papers with AA revising the outlook to ‘stable’ from ‘negative’.
“The current revision in outlook back to ‘Stable’ reflects IBHFL’s strengthened capital position and expected further capital mobilization in the medium term, continued fundraising..,” the rating company said in a note in March when the borrowing company obtained a rating for retail bond issue aggregating up to Rs 15,000 crore.
Indiabulls Housing Finance reported a 3.2 percent rise in its consolidated net profit to Rs 282 crore during the April-June quarter.