Indiabulls Housing Finance repays Rs 2,232 crore, clears all $3-billion ECBs, ET RealEstate

August 26, 2023

MUMBAI: Indiabulls Housing Finance has repaid ₹2,232 crore of external commercial borrowings (ECBs) raised in 2018 from Barclays, Japan’s MUFG and Sumitomo Mitsui Banking Corp, Taiwan’s CTBC and Australia and New Zealand Banking Group (ANZ), bringing to an end a deleveraging process the company started after IL&FS had foundered in 2018.

Chief executive Gagan Banga said with the repayment on Thursday, the company has repaid all of its $3 billion foreign currency borrowings availed of in the last few years and will now shift focus to growing its assets under management (AUM).

“From here on our debt repayments are merely ₹400 crore to ₹700 crore a month. This will be more than comfortably covered by repayment from the loan portfolio. At the end of this quarter, our borrowings will be down to about ₹36,000 crore and our net debt to equity will be only 1.8 times,” Banga said.

In all, since the IL&FS fall in September 2018, the company has repaid ₹85,512 crore on a net basis, halving its balance sheet to ₹74,413 crore from ₹1.39 lakh crore at the end of September 2018.

Banga said with the deleveraging now complete the company will now focus on growth with excess collections of about ₹1,200 crore to ₹1,600 crore a quarter now available for asset growth.

“By the end of this financial year, Indiabulls Housing Finance is looking to double disbursals to ₹1,200 crore per month primarily focused on affordable and green housing. From the third quarter the company will start posting steady AUM growth and is on track to get to mid-teen return on equity by FY26,” Banga said.

However, the company will pursue the so-called asset light model depending on its partnership with its eight banking partners under the co-lending model in which it will keep only 20% of loans originated on its books.

“Through this model, we can build our AUM without getting into any asset-liability management issues at the same time earning a steady fee income. Loans on our book will grow in single digits even as we expect AUM to grow by over 20% in fiscal 2025,” Banga said.

Out of its total AUM of ₹70,000 crore currently, about ₹50,000 crore are loans on its own book. The company expects to keep about 35% of loans on its own book.

The company will also shortly change its name as part of dissociating with erstwhile promoters. Sameer Gehlaut has also reduced his stake to 2% from 21% in December 2021 and is poised to totally exit the non-banking finance company he founded.

  • Published On Aug 25, 2023 at 09:13 AM IST

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