LIC Housing Finance, the second-best performer among non-banking finance stocks in Asia this year has raised $135 million selling shares to institutional investors in order to boost mortgage lending in India.

The Mumbai-based company sold 10 million shares at Rs 658 apiece, according to a sale document. LIC Housing’s shares surged to a record high in Mumbai today. The company planned to sell equity for Rs 650 to Rs 660, Chief Executive Officer R R Nair said yesterday. He declined to comment today. The mortgage lender, controlled by India’s biggest life insurer, plans to use the money to extend loans in a nation that faces a shortage of 24.7 million homes. Demand for homes is rising as Asia’s third-largest economy expands, boosting incomes. LIC Housing will also use the proceeds to bolster capital.

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The shares, the second-best performer on the 67-stock Bloomberg Asia Pacific Diverse Financial Services Index, surged 6.9 per cent to Rs 720 at 12:04 p.m. in Mumbai. They have tripled this year. Indian companies are selling shares to tap renewed interest in local stocks that’s lifted the benchmark Sensex 72 per cent this year. Overseas funds have invested $8.87 billion since January 1, compared with net sales of $12 billion in 2008, according to data posted on the regulator’s wesite.

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