$20m Adb Loan To Hdfc For Karnataka Project
Asian Development Bank has finalised a $ 20 million loan to Housing Development Finance Corporation (HDFC) to finance housing projects in Karnataka.
The 25-year loan, which was finalised last month, will be the Manila-based banks maiden offering to the Indian housing sector.
HDFC managing director Deepak M Satwalekar told Business Standard the loan will carry an interest rate of 6.82 per cent in dollar terms and will be repayable after 25 years.
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The fund will be earmarked for development of the housing sector in Karnataka.
ADB, of late, has generated a lot of interest in the Indian housing industry and is negotiating with several companies, including Hudco and IL&FS to fund housing development projects.
The fund position of HDFC, said Satwalekar, was quite comfortable due to the robust growth in its retail deposits, wherein the company mopped up Rs 625 crore during the first six months of the current fiscal.
During 1995-96, the companys deposit mobilisation programme had chipped in Rs 659 crore, registering a 36 per cent growth over the previous fiscal.
Despite a one per cent reduction in interest rates (14 per cent) for 1-3 year deposits, the companys collections have gone up. The retail investor is concerned about the security of his investment, and we offer total security for their money, Satwalekar said.
He said the housing finance major is not interested in tapping the Euro-market. At one point, we were interested in GDR offerings but were not allowed to do so. Now the norms have been relaxed, but we have devised alternative modes of financing to meet our fund requirements.
HDFC, in a novel fund-raising exercise, has placed equity shares to overseas investors.
Criticising the governments go-slow approach on the insurance sector liberalisation, HDFC chairman Deepak Parekh said: The housing finance sector has a lot of synergy with the life insurance business and we are waiting to see some bold measures.
The company has also signed an agreement with Standard Life of the UK to make a foray into the insurance sector, once private companies are allowed entry into this segment.
Justifying the companys plans to venture into insurance, Parekh said While the insurance sector generates a lot of long-term funds, housing finance companies are in constant need of such resources.
Life insurance companies are savings institutions, why is such a hue and cry about reforms in this sector? Parekh asks.