LIC Housing to roll out Rs 350 cr fund

In order to cash in on the real estate boom, Life Insurance Corporation Housing Finance (LICHF) is set to launch a new venture capital fund for realty projects. The size of the fund, which is awaiting regulator approval, is likely to be Rs 300-350 crore, Director and Chief Executive S K Mitter said.

LICHF's new realty fund is expected to invest in residential projects. However, other details of the fund were not disclosed. Mitter said LICHF had taken a 5 per cent stake valued at Rs 7.5 crore in the new Rs 150-crore credit card arm of LIC, which is likely to begin operations in six months.

On the interest rates, he said, "For the next three months, the rates are not likely to come down. Today, borrowing rates are as high at 9.1 per cent. If borrowing rate comes down, then we will pass on the benefits to the customers." Demand for housing finance is high, but the supply is less. The housing financing market is likely to touch Rs 1.40 crore this year, Mitter said.

As part of its overseas expansion plans, LICHF will open a new office in Singapore. Currently, it has branches in Dubai and Kuwait. Meanwhile, LICHF Care Homes, a 100 per cent subsidiary of LICHF, is planning to open residential units for senior citizens in Punjab, Orissa, Kerala and West Bengal. The first project was unveiled in Bangalore.

During April 2007-February 2008, the company sanctioned Rs 7,385 crore against Rs 4,888 crore in the same period last financial year. Disbursements stood at Rs 5,941 core compared to Rs 4,199 crore.