Sundaram-BNP to raise Rs 100 crore from promoters

Also planning to raise around Rs 1,250 crore from National Housing Bank & Rs 1,500 crore from debt market

Sundaram BNP Paribas Home Finance has raised around Rs 100 crore from its promoters – Sundaram Finance and BNP Paribas.

The Chennai-based company said it would raise another Rs 100 crore this year and will borrow money to tune of around Rs 4,000 crore. The company is also planning to foray into builder financing.

Srinivas Acharya, managing director, Sundaram BNP Paribas Home Finance said that our two JV partners – infused Rs 100 crore capital through an equity issue. A similar capital infusion of another Rs 100 crore could take place this year.

The company is also planning to raise Rs 3,950 crore this year including around Rs 1,250 crore from National Housing Bank and Rs 1,500 crore from the debt market. It may be noted, last year the company raised Rs 3,050 crore, of which Rs 600 crore was raised from National Housing Bank.

The proposed fund raising will support company home loan disbursements for fiscal 2014 of Rs 3,100 crore and company has an asset base of Rs 6,000 crore.

Acharya said, “the availability of long term fund continues to be a critical problem for the Home Finance Sector. With the exception of refinance provided by NHB, all other borrowing sources do not go beyond three years. There is an immediate need for Housing Finance Companies to source long term loans and we earnestly hope that the Government will make more financial institutions come forward to lend to HFCs for longer tenures to avoid asset-liability mismatches in the future.”

On expansion, he said, from the current 100branches the company is planning to take total branch network to 150 this year. Majority of this will be in South. “We plan to expand into Maharashtra, Gujarat and Rajasthan this year. Current contribution from outside South is two%. We expect this to double this year to four%,” said Acharya.

He added, home Finance industry will grow at around 20% this year and company's target is to grow at better than industry growth.

On the outlook for fiscal 2014, Acharya said, “we continue to believe that the South market still holds a lot of potential and gives us an opportunity to grow further by targeting the untapped Tier 2 and Tier 3 towns in this region. In addition, we are confident of gradually increasing the Home Loan contribution from non-South markets where we have established a presence and made small inroads in the last 2years.”

Sundaram BNP Paribas Home Finance, the Home Finance subsidiary of Sundaram Finance Ltd., has reported a 35% growth in net Profit for the year ended March 31, 2013 to Rs 126 crore from Rs 94 crore.

Home Loan Disbursements for the year ended 31st March 2013 went up 32% to Rs 2,572.38cr from Rs 1,948.12 cr registered in the previous year.