Dewan Housing To Securitise Rs 25-Crore Loans

Dewan Housing Finance Corporation (DHFC) will securitise Rs 25-crore worth of housing loans as it enters the market next month.

This is the last of the four housing finance companies to partake in the National Housing Bank's pilot securitisation project that took off in 1994.

DHFC has roped in SBI Capital Markets, ABN Amro and I-Sec among the merchant bankers to clinch the securitisation deal.

Though upbeat on the deal, Kapil Wadhawan, managing director, DHFC, said: "We would like to test the waters before venturing with a larger securitisation issue".

The coupon rate will be decided just a few days prior to the actual entry into the market, said industry sources, as this is benchmarked against yield of government securities of similar maturity.

In addition to the Rs 25-crore to be raised through securitisation, DHFC proposes to come to the market at the "fag end of the fiscal with another debenture issue" to finance its 80 per cent growth targets, Wadhawan said.

"We anticipate an 80 per cent growth in lending in the current year, from Rs 165 crore in 2001 to Rs 300 crore by 2002," Wadhawan said. He admitted that the housing finance company would need to raise funds to fuel the targeted growth.

DHFC has an on-going non-convertible debenture issue of Rs 50 crore and it will next month raise an additional Rs 25 crore through the securitisation deal in association with the National Housing Bank.

DHFC boasts of a capital adequacy ratio of 17 per cent. "We would thus not be interested in selling our loans, but rather build volumes," said Wadhawan. The housing finance outfit enjoys a net worth of Rs 112 crore.

The three other housing finance companies -- HDFC, LIC Housing and CanFin Homes -- which were part of the pilot securitisation project, had come out with larger issues in the past in the range of Rs 38 to 50 crore.