LIC Housing Finance Ltd (LIC HFL) is planning to launch its Qualified Institutional Placement (QIP) by issuing 4.6 crore fresh equity shares (which according to today's share price amounts to around Rs 1,200 crore) in next two to three months. Besides, despite the adverse market conditions, the company expects to grow at 20% this year, said a senior company official.
Speaking to reporters after launching the 15th edition of the company's property fair Ungal Illam 2012 (Your Home), in Chennai, V K Sharma, director and chief executive, LIC Housing Finance Ltd, said, "We have received the share holders approval to issue QIP. The value of the issue is not finalised and we can raise it at any time from the time of share holders' approval. We may launch it in September of October this year."
He added that the company initiated the QIP procedure anticipating some regulation from its regulator, National Housing Bank (NHB), in lines with the Reserve Bank of India's (RBI) revised norms on capital adequacy ratio. The present recommended capital requirement was of 12%, with 6% each for tier I and tier II capital. The company has a capital adequacy ratio of 14%, 8% in tier I and 6% in tier II. The company would proceed with fund raising even though NHB clarified that it is not changing the norms.
"After all, we are in good position and this is better time to raise money. Otherwise, when you need you may not able to raise funds," said Sharma.
The company, in March, 2012, has recieved approval from the shareholders to issue around 4.6 crore shares through Qualified Institutional Placement of equity shares of face value of Rs 2 each, or other securities convertible in equity shares to qualified institutional investors at the price calculated as per the Sebi (ICDR) regulations.
LIC HFL is looking at a disbursement target of Rs 22,000 crore this fiscal, compared to the last year's disbursement of Rs 20,000 crore.
South India is a stronghold for the company and has posted a disbursement of Rs 4800 crore last year of its total Rs 20,000 crore disbursement, said S Ramasamy, regional manager LIC HFL. This is expected to grow 30% to around Rs 6200 crore in the current fiscal, he added.
The company, which has representative offices in Dubai and Kuwait, in West Asia, is also receiving considerable demand from Indians in Singapore, he said.