DHFL to launch housing finance JV with IFC

Mumbai-based mortgage lender Dewan Housing Finance (DHFL) today said it planned to launch a finance joint venture (JV) focused on low-income housing in partnership with International Finance Corporation (IFC), the private sector lending arm of the World Bank.

“The company will focus on low-cost housing in the eastern part of the country. We will have operations in a number of states, including Bihar, Uttar Pradesh, Orissa, Chhattisgarh, Madhya Pradesh and Jharkand,” said Kapil Wadhawan, chairman & managing director of DHFL.

IFC will have a 20 per cent stake in the venture. The rest will be held by DHFL. While details had not been finalised, the paid-up capital was likely to be in the region of Rs 100 crore, Wadhawan said.

DHFL also plans to raise up to Rs 500 crore in Tier-I capital through qualified institutional placement and preferential allotment of shares in the first quarter of the current financial year.

“Our board meeting will be held in the next couple of days to approve the capital-raising plan,” Wadhawan said. He added the promoter family intended to maintain its stake by participating in the preferential rights issue. The Wadhawan family had 47.93 per cent stake in the company as on December 31, 2009.

DHFL also plans to raise up to Rs 4,500-5,000 crore debt to fund expansion in the current financial year.

“We will raise debt through various sources such as bank term loans, refinance from National Housing Bank and non-convertible debentures,” he said.

DHFL is aiming to lend over Rs 5,000 crore in 2010-11.

“We have been growing at a compounded annual growth rate of 30-35 per cent and expect that to continue in the new financial year,” Wadhawan said.