LIC Housing Finance said on Friday that it has begun the process of raising funds through Qualified Institutional Placements this fiscal, via issue of 4.06 crore shares valued currently at about Rs 1,100 Crore.
The Board of Directors approved a proposal to raise funds through QIP at the Annual General body Meeting in March this year, LIC Housing Finance Director and Chief Executive, Mr V K Sharma, told reporters here.
“We have got a one year time period till March 2013. Right now, the process is on. We will take a decision in two to three months (on raising capital)”, he said after inaugurating the 15th edition of “Ungal Illam”, its flagship exhibition.
Mr Sharma said the Board had given nod to liquidate 4.06 crore shares (about 2 per cent). “The value of capital to be raised will be price of each share,” he said, adding that they would consider it when the market is “conducive“.
Shares of the company were trading at Rs 263 apiece, down by 2.36 per cent in the afternoon BSE.
Mr Sharma said, “Our Capital Adequacy is 14 per cent. Last year, when RBI changed norms for NBFCs and others, we were under the impression that our regulator (NHB) would also change it. But they did not. They have issued clearances“.
On the capital raising plan, he said, “We have started the process. It is good to raise capital, particularly when there is a high interest rate (scenario in the market).
Mr Sharma said that every year we are growing more than 20 per cent and capital raising proposal would bring “value” to shareholders and to the company itself.”
Total assets managed by LICHF are around Rs 60,000 crore and last year total disbursement was Rs 20,000 crore. “This year we are looking at Rs 22,000 crore with a growth of over 20 per cent,” he said.
To a query, Mr Sharma said they are yet to appoint merchant bankers for the fund raising proposal and added that this year looks to be a “challenging time” due to uncertain market conditions.
“This year looks to be challenging times (due to high inflation, interest rates). Though the demand (for real estate among individual buyers) has not decelerated, supply is decelerated”, he pointed out.
He said that in the commercial business, real estate projects are witnessing a “clear cut slowdown”. Ninety five per cent of total business constitutes retail lending and the balance real estate developers.