Indiabulls Housing to restructure debt to lower borrowing rate

The average cost of borrowing currently stands at 9.3% while incremental is 8.91%

Indiabulls Housing Finance is planning to restructure its long-term loan portfolio to bring down the average cost of borrowing for the company by 30-40 basis points.

"Part of the proceeds from the retail non-convertible debentures (NCDs) issue would be used to restructure our existing loan. We are targeting to bring down our average cost of debt by 30-40 basis points by this financial year from current levels," Indiabulls chief manager, analytics, Aman Gudral said here today.

The average cost of borrowing currently stands at 9.3 per cent while incremental is 8.91 per cent and bank finance is about half of the total borrowing, he said.

The third largest housing loan company is set to hit the capital market on September 15 to raise up to Rs 7,000 crore NCDs.

"With lucrative coupon rate between 8.55-9.15 per cent per annum depending on tenure between 3 and 10 years we expect the retail issue of NCD will be successful raising Rs 7,000 crore," Indiabulls national business manager (mortgages) R Bandral said.

Gudral said there was no further retail bond offering plans as of now in this calender year.

The housing finance company, which was aiming to cross Rs 1 lakh crore in balance sheet size in 2016-17 from Rs 76,436 crore in last financial year, has already raised some Rs 12,000-odd crore through bond issues including 'masala bond', given the conducive appetite from the investors.

Recently, India Bulls had raised Rs 1,330 crore 'masala bonds' out of total ceiling of Rs 5,000 crore.