Advertisement
When should a housing society in Mumbai start considering re...
From GST on JDAs to SEBI’s REIT reclassification and the S...
Stay ahead in the world of real estate with our daily podcas...
Stay ahead in the world of real estate with our daily podcas...
IIFL Home Finance plans to engage retail investors for the first time in three years, motivated by recent RBI restrictions on non-banking finance companies (NBFCs). With a draft prospectus for raising up to INR 3,000 crore, CEO Monu Ratra indicated an initial fundraising target of INR 300-500 crore this quarter. The mortgage company, focusing on affordable housing, reported an AUM of INR 36,000 crore, with 90% of its portfolio dedicated to this segment. Following regulatory relief on its gold loan business, IIFL's outlook was recently upgraded to stable by Crisil.
IIFL Home Finance plans to tap into retail investors for the first time in three years as it aims to diversify its liability profile, prompted by the Reserve Bank of India's recent restrictions on bank borrowings by non-banking finance companies. The firm has submitted a draft prospectus to facilitate the potential raising of up to INR 3,000 crore. However, CEO Monu Ratra informed ET that the company is likely to enter the market this quarter for an initial fundraising of INR 300-500 crore. Advertisement
Ratra indicated that they were contemplating a smaller fundraising tranche in the third quarter to gauge market interest, as they were set to launch a public bond after a considerable break. However, he emphasised that they were not in immediate need of funds and would only move forward if the pricing was favourable.
IIFL Home Finance is fully owned by IIFL Finance, which recently received regulatory relief after the central bank removed restrictions on its gold loan business. Subsequently, rating agency Crisil upgraded IIFL Finance's outlook to stable on September 30.
Ratra mentioned that the mortgage finance company, which mainly focuses on the affordable housing segment, would be raising capital from retail investors for the first time since December 2021. He also noted the necessity of expanding their liability base, adding that the Reserve Bank of India was encouraging non-banking financial companies (NBFCs) to diversify.
In November 2023, the regulator increased risk weights on bank lending to NBFCs by 25 basis points to limit banks' loans to these companies. However, loans to housing financiers and those qualifying for priority sector classification were exempt from this RBI directive. The RBI noted in its September bulletin that, since then, there has been a significant decline in borrowing by NBFCs, particularly among those in the upper layer (NBFCs-UL).
As of the end of June, IIFL Home Finance reported assets under management (AUM) of approximately INR 36,000 crore, with 77% allocated to housing loans. Notably, around 90% of its housing loan portfolio consists of affordable housing. The AUM increased by 22% in the last fiscal year. Ratra indicated that they were aiming for high-teen growth, nearing 20% for the year.
With an eye on diversifying its funding sources, IIFL Home Finance is poised for growth in the affordable housing sector, capitalising on emerging opportunities while adhering to regulatory changes. The company's commitment to a robust fundraising strategy signals confidence in its future trajectory.
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
