Page 18 - Banking Finance September 2018

HOUSING

Indiabulls Housing Fi- ICRA Upgrades Long Term Credit Rating of Piramal Capi-
nance raises Rs 3,000 tal & Housing Finance Limited to AA+ (Stable)
Piramal Capital & Housing Finance Limited (PCHFL), the wholly owned subsid-
crore
iary of Piramal Enterprises Limited, has received
an upgraded rating of AA+ (Stable) from AA (Posi-
tive) by ICRA (an affiliate of Moodys) for its Long-
Term Bank Lines, Non-Convertible Debentures and
Sub-Ordinate (Tier-II) Bonds.
The rating upgrade takes into account the healthy ramp-up in financial services
business with increasing diversification of its asset base while maintaining
Indiabulls Housing Finance raised
about 3,000 crore through bonds and favourable asset quality supported by robust risk management practices at
offshore loans, using the proceeds to PCHFL. The rating upgrade also factors in the gradual scaling up of the home-
meet the ever-increasing demand for loans portfolio which is expected to improve the diversity in the overall loan
credit from borrowers keen to step book which had hitherto comprised of wholesale loans.
onto the property ladder. LIC of In- This rating also draws comfort from the Group's expertise in real estate given its
dia and Credit Suisse have subscribed presence across the value chain, as well as the strong leadership team, strong
to domestic bonds of 1,000 crore systems and processes. ICRA has also reaffirmed the short term rating of A1+ for
each. the commercial paper programme. This reinforces a trend of strong revenue
growth coupled with revenue diversification and robust risk management metrics.
These 10-year bonds offer about
8.90 percent. It also raised about Mr. Khushru Jijina, Managing Director, Piramal Capital & Housing Finance said,
Rupee 250 crore with five-year ma- "Our existing relationships with our counterparts across sectors, the financial
turity bonds that were sold to other flexibility arising out of being a part of the Piramal Group and strong manage-
investors. Five-year bonds will pay ment team with prior experience in retail lending are the key drivers of this
8.80% a year. Furthermore, the rating upgrade. With a goal to increasing diversification and granularity across
triple-A rated company also raised our lending business, the company will continue to grow profitability, raise funds
$105 million (about Rupee735 crore) at competitive rates and maintain healthy asset quality."
from overseas banks as part of its PCHFL's strong capitalisation profile supported by the sizeable capital infusion
external commercial borrowing by the promoter group, provides it with enhanced financial flexibility and ad-
(ECB) programme. equate head-room for growth over the near to medium term and the increas-

So far, Indiabulls Housing has raised ing prominence of financial servicing business for the Piramal Group.
more than $1 billion in the ECB mar-
ket with ANZ, Barclays Bank, CTBC, Indiabulls Housing Finance Postpones Interest Rate
and MUFG helping their recent off- Hike for Kerala
shore fundraising. Early July, ET re- Indiabulls Housing Finance said it has decided to postpone the interest rate hike
ported that the company had raised for its Kerala-based customers by two months and
$240 million via ECB. also waive penalty for delay in payment of August
The housing finance company is likely and September EMIs for its home loan customers.
to use interest rate swaps to convert As part of its "relief measure, the housing finance
these fixed rate liabilities to floating company has also decided to waive the process-
rate, which helps in asset-liability ing fee for home improvement loans to customers
management, said one of the per- whose homes have been affected.
sons cited above. Interest rate swap, "The interest rate hike, which is applicable for all customers post the increase
or IRS, is a derivate instrument that in repo rate, has been deferred by two months specifically for Kerala based
companies use as the hedge against
customers. The new increased interest rates will now be applicable from Octo-
interest rate fluctuations.
ber 2018," the company said in a statement.

18 | 2018 | SEPTEMBER | BANKING FINANCE