Sundaram BNP Paribas Home Finance to buy loan portfolio

Sundaram BNP Paribas Home Finance plans to buy loan portfolio of smaller home financiers to the tune of Rs.50 crore this year while looking at raising Rs.1,500 crore for business purposes, said a top company official here Wednesday.

"We are in talks with smaller home finance companies to buy their portfolio in the affordable housing space," Srinivas Acharya, managing director, told reporters while announcing the company's first half results.

He said the small companies would originate the loan and Sundaram BNP Paribas would take it over.

According to him, the company is in talks with one home loan company for such a deal, sized around Rs.11 crore.

Acharya said the company is looking at doing around Rs.50 crore worth of business under this portfolio which has a potential of around Rs.700 crore.

He said the company is planning to raise Rs.1,500 crore this year through a mix of term borrowings, sub-ordinate debt, commercial paper, deposits and refinance from National Housing Bank.

Sundaram BNP Paribas Home Finance closed the first half of the current fiscal with a net profit of Rs.78.25 crore up from Rs.70.17 crore posted during the corresponding period of the previous year.

The company's loan book stood at Rs.7,414 crore at end of Sep 2014. The disbursements during the first half stood at Rs.1,022 crore down from Rs.1,338 crore disbursed during the corresponding period last year.

According to Acharya, the real estate market was quite sluggish during the first half with excess supply and unsold stock on the back of buyers adopting a wait and watch approach hoping for a reduction in property prices.