DHFL plans to meet 10% of borrowings from retail deposits

The company plans to raise Rs 25,000-27,000 cr this year to fund loan growth and hopes to mop up 10% of this from retail deposits

Dewan Housing Finance Ltd (DHFL), the second-largest pure-play home loan player, plans to further raise share of retail deposits in overall fund to 10% this fiscal as part of its strategy to diversify the sources of borrowings. 

Announcing the launch of this new product, Mr Harshil Mehta, CEO, DHFL said, "We are happy to launch the corporate deposit product as part of our strategy to emerge as a diversified financial services group to cater to the wide variety of our customer needs. The new product is aimed at meeting the short term investment requirements of corporate customers. It showcases our in-depth knowledge and understanding of the varied investment needs of corporate customers in the country.”

He further added, “Today, DHFL knows how to measure, manage and allocate risk for both retail and corporate customers. This differentiates us for value creation and enables us with the expertise to visualize the investment needs of this segment. We are known for our competitive deposit offerings and this new product will further strengthen our desired positioning, backed by the highest credit rating."

With pick-up in home purchases, the company sees a better year ahead and is accordingly planning to raise Rs 25,000-27,000 crore this year to fund loan growth and hopes to mop up 10% of this from retail deposits.

Stating that the company’s retail deposits have been steadily rising over the years, Mehta said “three years ago it was only four% but it rose to over 8.5% in 2015- 16 and we hope to take it to 10% or thereabout this fiscal year.”

“Three years ago their (DHFL) bank borrowings were 80% of the total funds which has come down to 50% as now we mop up the rest from many sources, including commercial papers, NCDs and external commercial borrowings.”On how much of the Rs 27,000-crore fund raising has been done so far this fiscal, Mehta said they have drawn down around 15% of the amount till now.

He declined to offer advances target citing the silent period ahead of the first quarter earnings scheduled for next week.

The company today launched an attractive short-term deposit scheme for the corporates, offering 8.40% return for one year period.

This is the first such scheme from the housing finance company, Mehta said, adding DHFL hopes to launch many more attractive products going forward.

The scheme, which can help companies meet their short-term investment requirements, is open only to public and private limited firms and carries an A1+ rating from Crisil.

The minimum deposit amount for the scheme is Rs 10 lakh for a tenure of 31-364 days deposit with the flexibility to choose between an 'auto renewal' and an 'auto repayment' option.