Birla Home Plans To Up Equity Base

Birla Home Finance Ltd, the 50:50 joint venture between KK Birla group's Chambal Fertilizers and BHW Holdings AG of Germany, is planning to hike its equity base.

Klaus Baetz, executive director, said, "We are planning to hike our equity to Rs 100 crore by March 2003 through an additional capital infusion of Rs 25 crore by each of the partner. We will expand our equity capital to Rs 200 crore by 2004-05. He added, "We also have plans to raise an additional Rs 50-100 crore through non-convertible debentures."

The home finance company will also introduce a German model of repayment of housing loans. "We are mulling over introducing the German model in India, under which repayment will be possible for 30 years," Baetz said. But he refused to divulge details.

 

On the expansion plan, Baetz said, "We have 10 branches and 17 satellite offices in India and we plan to open 40 more offices in current fiscal. We expect to become a global player by 2020 by using information technology and telecommunications."

Meanwhile, Birla Home has launched a new loan scheme. Baetz said, "Only 30 per cent of the Indian housing sector is financed by organized sector, while rest 70 per cent is still dependent upon friends, relatives and other source of money. The reason is that the repayment of monthly instalments of loans in India is still higher as against the income of borrowers. The low middle-income group people or those who do not have documentary evidences of their income face problem in getting loan despite they are the actual borrower in the industry. Keeping this in view we have launched an easy home loan deposit scheme. We will target small businessmen, low income group people and those who have a regular saving habit."

The easy home loan deposit scheme requires a member of the scheme to save on a monthly or quarterly basis for a specified period of 3-5 years with 5 per cent compounded interest rate.

After the completion of the specified period, the member would be entitled for a home loan at a concessional rate of interest for purchase or construction of house in India. The company offers the member a loan at guaranteed 7 per cent interest rate.

He also said that the company plans to go public after achieving a significant business and a sound track-record for successive three four years. The aim is to mop up funds for further expansion.