ECBs are considered attractive as cost of raising the loan overseas is lower than that of domestic borrowings
Last month, the Reserve Bank of India (RBI) allowed real estate developers and housing finance companies to raise up to $1 billion through external commercial borrowings (ECBs) in the current fiscal to promote low-cost housing projects.
Sharma said a committee comprising senior officials of the company has been formed, which is in touch with the apex bank on the ECB issue.
"We expect that we will be in that segment which has been permitted by the RBI. We expect that we will be raising somewhere around Rs 700-1,000 crore. We will apply for that," Sharma said on the sidelines of a two-day property exhibition here.
ECBs are considered attractive as cost of raising the loan overseas is lower than that of domestic borrowings. Besides, they provide an additional avenue to access large amount of funds from global financial markets.
To a query on when the company would raise ECBs, Sharma said: "I cannot comment on that. Board resolution is there in place. We have created a committee at company level and they are in touch with RBI."
He said LIC Housing Finance Limited (LICHFL) is expected to complete the institutional placement offer by fiscal end.
The QIP (Qualified Institutional Placement) was delayed due to variety of reasons, including volatility in the markets, he added.
Though he did not mention the exact amount being raised through QIP, a senior official earlier told PTI it is hoping to raise up to Rs 1,200 crore through the proposed issue of new shares.
LIC, which is promoter of LICHFL, currently holds 40.31% stake in the company. While institutional investors, both foreign and domestic together, are holding 41.47% shares, others hold 18.22% shares.
The merchant bankers appointed for the issue include Nomura, Kotak Securities, HSBC, Citigroup and Avendus Securities, according to the official said.
Parent LIC's stake in the company currently stands at 40.31%, which will come down to the 36.54% level after the issue.
LICHFL, which is now charging 10.25% interest on home loans, will wait for Reserve Bank of India's policy review slated for January 29 before taking a decision on revising interest rates, Sharma said.
Last year, the company disbursed Rs 20,000 crore loans and is targeting Rs 25,000 crore this year, he added.
After they together paid Rs 12 lakh to settle charges related to alleged delay in amending insider trading norms