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ADIA-backed IIFL Home Finance raises nearly $100 million from IFC

Pegs total fund requirement upto Rs 14,000 cr in Fy24

IIFL Home to issue up to Rs 1,000 cr of retail bonds at 8.2-8.75% interest

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Abhijit Lele Mumbai

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Abu Dhabi Investment Authority (ADIA) backed IIFL Home Finance has raised about $100 million from the International Finance Corporation (IFC) for affordable housing and green finance in India. It has also earmarked a fund raise of Rs 13,000 to 14,000 crore in FY24, out of which Rs 2,500 crore will be through securitisation.

Monu Ratra, executive director and chief executive of IIFL HFL, stated that the debt from IFC, the private-sector lending arm of the World Bank group, is for six years with a cost of funds at 8.36 per cent, less than the cost of borrowing of 8.75 per cent in Q1 FY24.

The housing finance firm will not carry exchange risk pertaining to repayment. This is a third funding arrangement from an international financial institution, Ratra added.

Last month, the housing finance company secured a $50 million loan from the US International Development Finance Corporation (DFC) for financing affordable home loans with a special focus on sustainable housing.

In February 2022, IIFL HFL signed an agreement with the Asian Development Bank (ADB) for a $68 million loan (in equivalent Indian rupee) for affordable green housing for lower-income women borrowers in India.

Under the IFC partnership, 50 per cent of the funding is earmarked to promote housing finance for women borrowers, with the remaining half dedicated to financing green housing for buyers in this underserved segment. According to IFC estimates, India's green buildings market accounts for only six per cent of residential buildings, despite representing a $1.25 trillion opportunity between now and 2030.

Regarding the resource requirement for business growth, Ratra said it is estimated between Rs 13,000 to 14,000 crore. This would be raised through various sources including debentures, securitisation – direct assignment route. The company would opt for the private placement of non-convertible debentures. The lender will decide the quantum for debentures later.

The loan Assets Under Management (AUM) of the company stood at Rs 29,595 crore at the end of June 2023. The company expects to grow its asset book by over 20 per cent in FY24 and have adequate capital support for the same, Ratra said. Its capital adequacy stood at 51.2 per cent at the end of June 2023. In June 2022, ADIA inked a pact to take a 20 per cent stake in IIFL HFL for Rs 2,200 crore.

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First Published: Aug 21 2023 | 3:28 PM IST

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