LIC Housing Finance Limited (LIC HFL) is planning to launch its qualified institutional placement (QIP), issuing 46 million fresh equity shares (which according to on Sunday's share price amounts to around Rs 1,200 crore) in the next two to three months. Besides, despite the adverse market conditions, the company expects to grow at 20 per cent this year, said a senior company official.
Speaking to reporters after launching the 15th edition of the company’s property fair Ungal Illam (Your Home) 2012, in Chennai, VK Sharma, director and chief executive officer of LIC HFL, said, “We have received the shareholders approval to issue QIP. The value of the issue is not finalised and we can raise it at any time from the time of shareholders' approval. We may launch it in September or October this year.”
He added that the company initiated the QIP procedure anticipating some regulation from its regulator, National Housing Bank (NHB), in line with the Reserve Bank of India (RBI)’s revised norms on capital adequacy ratio. The present recommended capital requirement was of 12 per cent, with six per cent each for Tier-I and Tier-II capital. The company has a capital adequacy ratio of 14 per cent, eight per cent in Tier-I and six per cent in Tier-II. The company would proceed with the fund-raising even though NHB clarified that it is not changing the norms.
“After all, we are in a good position and this is the better time to raise money. Otherwise, when you need you may not be able to raise funds,” Sharma said.
In March 2012, the company had received the approval from the shareholders to issue around 46 million shares through QIP 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.
It has also sought the shareholders approval for preferential allotment of equity shares to offer, issue and allot 30 million equity shares of Rs 2 each at a premium of Rs 248 per share aggregating Rs 7,50 crore to Life Insurance Corporation of India (LIC), its promoter, on a preferential basis.
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. With the current economic situation and the market sentiments, the company expects the market to be tough for some more time. However, he said that the situation was expected to improve in the near future and some reduction in interest rates could be seen going forward.
South India is a stronghold for the company and has posted a disbursement of Rs 4,800 crore of its total Rs 20,000 crore disbursement last year, said S Ramasamy, regional manager, LIC HFL. This is expected to grow 30 per cent to around Rs 6,200 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.