LIC Housing Finance says looking at securitisation of NPAs

LIC Housing Finance Ltd (LIC HFL) has said that it would look at securitisation of its Non Performing Assets (NPAs) this year, if the tax and stamp duty issues are adressed. The company has also initiated e-auction process from this month, said Sunita Sharma, managing director and CEO of LIC HFL.

Speaking to reporters after inaugurating the 18th edition of Ungal Illam (Your house), an exclusive mega property fair organised by the company in Chennai, she said, "We have not done it (securitisation of assets) for many years. We will be looking at it this year and the quantum will not be high. We will be looking at Rs 4,000-Rs 5,000 crore".

She said that last year the company wanted to do it, but there were some tax issues and stamp duty related issues which affected the plan.

"If those things are sorted out, then only we will look at it. Otherwise will not do it," she added. When asked who would be securitising the assets, she said that the company has not started the process and details are not ready. Through securitisation of loans, the company could sell its portfolio of loans to a buyer, transferring the loan from its balance sheet to the latter's portfolio.

The company is also looking at e-auction of properties recovered due to non payment of loan. As part of this, it has entered into a memorandum of understanding with MSTC Ltd and has put around 14 properties with a total value of less than Rs 2 crore, on sale through e-auction during this month. It did not materialised the goal properly, due to reasons including that it would take time for people to be ready to purchase through e-auction, she said.

It is also targeting a loan disbursal of Rs 38,000 crore during the current fiscal, compared to Rs 30,000 crore last year. Another Rs 3,000 crore would be disbursed in the corporate segment. It has also set a target to raise Rs 43,000 crore through borrowing this year, of which around Rs 23,000 crore has already been raised so far.

She said that the company's average cost of fund is around 9.34 per cent and its main fund source, the non-convertible debentures, are of higher cost than some of the other sources. The NPA in retail sector as on March 31, 2015 was 0.24 per cent, while in the corporate sector, there were only three NPAs totalling to Rs 300 crore, she said.

The company, which has its offices in Dubai and Kuwait, in overseas, would also look at expanding its presence to other overseas destinations through representative offices, added Sharma.
EYE ON GROWTH

• LIC Housing Finance will securitise Rs 4,000-5,000 crore if tax, stamp duty issues sorted out
• Through securitisation of loans, LIC HFL could sell its portfolio of loans to a buyer, transferring the loan from its balance sheet to the latter's portfolio
• It is also looking at e-auction of properties recovered due to non payment of loan and has put 14 properties on sale