To fund this acquisition, Weaver Services is raising capital from prominent private equity investors such as Gaja Capital and Lok Capital, aiming to secure up to Rs 800 crore, according to a company release.

CIFL, a modern player in the affordable housing sector, highlighted that the sale is part of its strategic shift towards focusing on its core businesses. The transaction is still subject to regulatory approval.

“The capital released from this sale will enable Capital India to expand further, leveraging strong equity capitalization and improving operational performance,” said Pinank Jayant Shah, CEO of Capital India Finance Limited.

Upon receiving regulatory approval and finalizing the acquisition, Weaver Services plans to introduce a range of innovative home loan products tailored for citizens of Bharat.

“Our primary goal is to empower self-employed individuals in the unorganized sector, especially in Tier 2 and Tier 3 towns. Weaver is dedicated to promoting financial inclusion, with a special focus on providing access to women borrowers who often face challenges in traditional financial systems,” the company’s release stated.

Weaver Services comprises a team of finance experts, including Satrajit Bhattacharya, who previously led the Investments and M&A division at HDFC Limited, along with other former HDFC executives.

The post Capital India Finance Sells Housing Finance Subsidiary to Weaver Services for Rs 267 Crore appeared first on .

The revised guidelines, which include several operational adjustments, introduce three main changes for HFCs involved in public deposit-taking.

First, HFCs are required to gradually increase the minimum proportion of liquid assets held against public deposits from the current 13% to 14% by January 1, 2025, and further to 15% by July 1, 2025. Additionally, the percentage of unencumbered approved securities held as a proportion of public deposits has also been raised.

Second, the maximum amount of public deposits that deposit-taking HFCs can hold has been reduced from three times to 1.5 times their net owned funds, effective immediately.

Third, the maximum tenure for public deposits raised by HFCs has been shortened from 10 years to 5 years, and this has also had an immediate effect.

Crisil estimates that deposit-taking HFCs currently hold approximately Rs 25,000 crore in public deposits, which accounts for about 5% of their total borrowings.

Subha Sri Narayanan, Director at CRISIL Ratings, noted, “Most deposit-taking HFCs already meet the new requirements.

A few may need to boost their on-book liquidity to comply with the 15% guideline and adjust their new deposits to maintain the required ratio of public deposits to net-owned funds.

While the reduction in maximum deposit tenure may limit the flexibility of HFCs in managing their asset-liability maturity profiles, most HFCs do not have a significant portion of deposits with over 5-year maturities in their borrowing portfolios.”

HFCs have been granted sufficient time to phase in the liquid asset requirements and can let any excess or non-compliant deposits mature naturally.

The revised guidelines represent another step by the RBI to align the regulatory framework for HFCs with that of non-banking financial companies, a sector that has been under RBI’s supervision since 2019.

This move aims to reduce disparities between different regulatory frameworks and ensure a stronger focus on the core business and operational fundamentals.

The post Updated deposit requirements shouldn’t be too burdensome for HFCs: Crisil appeared first on .

The individuals involved in the settlement are Sidhant Chandalia, Naysar Parikh, and Ronak Narendra Parikh, as outlined in two separate orders issued by SEBI.

According to the settlement details, Sidhant Chandalia and Naysar Parikh each paid Rs 50.7 lakh as their portion of the settlement amount. Meanwhile, Ronak Narendra Parikh contributed Rs 45.5 lakh as a settlement charge and an additional Rs 8.98 lakh for the disgorgement of wrongful gains, including interest.

SEBI stated, “Given the acceptance of the settlement terms and the receipt of the settlement amount, the instant adjudication proceedings initiated against the Noticee(s) vide SCN (Show Cause Notice) are disposed of.”

The directives were issued following the submission of applications by the three individuals to SEBI, proposing to settle the ongoing proceedings against them “without admitting or denying the findings of facts” through settlement orders.

SEBI had initially launched adjudication proceedings against these individuals for their alleged violations of the Prohibition of Insider Trading (PIT) rules in connection with trading activities related to the scrip of PNB Housing Finance.

A show cause notice was issued to Sidhant Chandalia for allegedly communicating Unpublished Price Sensitive Information (UPSI) related to PNB Housing Finance.

Additionally, show cause notices were served to Naysar Parikh and Ronak Narendra Parikh, requiring them to explain why an inquiry should not be held and penalties imposed.

The notices were issued based on allegations that Naysar Parikh communicated UPSI while possessing it, and Ronak Narendra Parikh traded in the company’s scrip using the UPSI.

The post Three Entities Settle Insider Trading Charges with SEBI in PNB Housing Finance Case. appeared first on .

In contrast, SEBI returned the draft IPO documents of Santhan Textiles Ltd on July 31. Additionally, SEBI has lifted the abeyance on the proposed Rs 2,200 crore initial share sale of SK Finance.

The five companies, that submitted their preliminary IPO papers to SEBI between March and June, received observation letters from the regulator between July 30 and August 5. In SEBI’s terms, obtaining an observation letter signifies the regulator’s approval to proceed with the public issue.

According to the draft red herring prospectus (DRHP), Bajaj Housing Finance’s Rs 7,000-crore IPO includes a fresh issue of equity shares worth up to Rs 4,000 crore and an offer for sale (OFS) of equity shares worth Rs 3,000 crore by its parent company, Bajaj Finance.

This share sale is being conducted to comply with the Reserve Bank of India’s (RBI) regulations requiring upper-layer non-banking financial companies to be listed on stock exchanges by September 2025. The proceeds from the fresh issue will be used to strengthen the company’s capital base to meet future capital requirements.

Manba Finance’s proposed IPO consists entirely of a fresh issue of up to 1.26 crore shares, with no OFS component, as indicated in the draft papers. Currently, the promoters hold 100 percent of the Maharashtra-based Manba Finance. The fresh capital raised will be used to bolster the capital base for onward lending and general corporate purposes.

Baazar Style Retail’s IPO includes a fresh issue of equity shares worth Rs 148 crore and an OFS component of up to 1.68 crore shares by promoter group entities and other selling shareholders. The fresh issue size was initially Rs 185 crore but was reduced to Rs 148 crore after Volrado Ventures Partners Fund II raised Rs 37 crore in a pre-IPO round. The proceeds from the fresh issuance will be used for debt repayment and general corporate purposes.

Diffusion Engineers’ IPO will consist entirely of a fresh issuance of 98.5 lakh equity shares, with the proceeds being used to expand its existing manufacturing facility and establish a new one in Maharashtra.

Deepak Builders & Engineers India’s IPO will feature a combination of a 1.2 crore fresh issue of equity shares and an OFS of 24 lakh equity shares by promoters, as per the draft papers. The funds will be used for working capital requirements, debt repayment, and general corporate purposes.

The equity shares of these five firms are proposed to be listed on the BSE and NSE.

The post SEBI Approves Bajaj Housing Finance to Launch Initial Public Offering. appeared first on .

In Q4 FY24, the company’s net consolidated total income was Rs 6,948.61 crore, up 8.04 percent from Rs 6,431.23 crore in the same period the previous year.

The company’s managing director and CEO, Tribhuwan Adhikari, stated, “We were able to close the year with record high margins and profits thanks to our focus on reduction of non-performing assets and control over funding costs.”

The company’s board of directors, among other things, accepted the dividend recommendation for the fiscal year 2023–2024 450%, or Rs. 9 for each equity share valued at Rs. 2. The board suggested a 450% dividend.

It gave its approval to Anil Kaul’s appointment to the company’s board as an extra independent director.

Its total debt to total assets was 0.88%, net profit margin was 17.50%, gross non-performing assets was 3.31%, net non-performing assets was 1.63%, and the liquidity coverage ratio was 175.34% as of March 31, 2024. Its net worth was Rs 29,226.51 crore.

For the quarter, net interest income came to Rs 2,238 crore, with net interest margins standing at 3.15%. Total disbursements increased by 14% to Rs 18,232 crore in Q4 FY24 from Rs 16,027 crore in the same period in FY23. Project loans were disbursed at Rs 1,501 crore as opposed to Rs 1,554 crore in Q4 FY23, while individual house loan disbursements were at Rs 14,300 crore, up 15% from Rs 12,406 crore in Q4 FY23.

Compared to the same time last year, when net interest income (NII) was Rs 1,990.30 crore, it increased by 12% to Rs 2,237.60 crore. The quarter’s net interest margin (NIM) was 3.15%, compared to 2.93 % in Q4 of FY23.

The individual house loan portfolio increased by 7% to Rs. 2,44,205 crore as of March 31, 2024, from Rs. 2,28,730 crore the previous year. As of March 31, 2024, the portfolio of project loans was worth Rs. 8,036 crore, compared to Rs. 11,738 crore on the same date in 2023. From Rs 2,75,047 crore in the prior year to Rs 2,86,844 crore this year, the total outstanding portfolio increased by 4%.

Expected Credit Loss (ECL) reporting governs asset classification and provisioning adjustments for potential credit loss under IndAS.

As of March 31, 2024, the provisions for ECL were Rs. 6270.06 crs, compared to Rs. 7230.26 crs on the same date in 2023. As of March 31, 2024, the Stage 3 Exposure at Default was 3.31%, compared to 4.37% on the same date in 2023.

The post In Q4 FY24, LIC Housing Finance’s net profit decreases by 9.14%. appeared first on .

This increase in outstanding home credit was ascribed by real estate and banking experts to pent-up demand and a robust rebound in the residential real estate market following the COVID outbreak.

The credit outstanding for housing (including priority sector housing) stood at Rs 27,22,720 crore in March 2024, up from Rs 19,88,532 crore in March 2023 and Rs 17,26,697 crore in March 2022, according to data from the Reserve Bank of India (RBI) on sectoral deployment of bank credit for March 2024.

Additionally, the data indicated that as of March 2024, the outstanding credit for commercial real estate was Rs 4,48,145 crore. March 2022 saw it at Rs 2,97,231 crore.

Numerous real estate advisors have reported large increases in both housing sales and prices throughout the last two fiscal years.

When contacted, Bank of Baroda Chief Economist Madan Sabnavis stated that the housing boom observed across all categories is the reason for the significant increase in home loans.

Sabnavis mentioned that the government’s initiative has specifically led to an increase in the affordable housing market.

“There was also some pent up demand for buying homes in the last two years after COVID which is getting reflected here,” he explained.

According to Sabnavis, the increase in housing loans would continue to be strong but would slow down to 15–25% because of the greater base.

Samir Jasuja, CEO and MD of PropEquity, a top provider of real estate data and analytics, commented on the RBI data and stated that the substantial increase in the number of homes launched and sold in the last two fiscal years is the main cause of the rise in the amount of housing loans outstanding.

“Major Tier-1 cities have seen high rates of price appreciation ranging from 50-100 per cent since FY 2021, which has influenced an increase in average loan size per property,” he stated.
Advt

Jasuja believes that as long as there is a high demand for residential real estate, the home loan market would continue to grow.

The Indian real estate market, which provides support to over 200 auxiliary industries such as steel and cement, has been seeing robust demand since 2022. Prior to this, the market had been stagnant for over ten years due to low sales and steady prices.

In addition to the disruptions brought about by the new real estate law, RERA, GST, and demonetisation, the real estate industry suffered from a lack of confidence as many developers failed to complete projects after collecting money from clients. Nonetheless, the industry recovered after COVID since the pandemic highlighted the value of owning a home again.

Industry insiders predict that by 2030, the sector will have crossed the $1 trillion mark.

Senior Vice President and Group Head at rating agency ICRA Karthik Srinivasan stated that the merger of Housing Development Finance Corporation Ltd (HDFC) with HDFC Bank, which became effective in July 2023, is the reason behind the notable increase in retail housing loans that banks deployed in FY’24.

“Mortgage saturation level is steadily rising in India (around 12 per cent as of March 2024; the amount of housing loans due as a proportion of GDP), but remains fairly lower than developed economies, implying significant room for growth,” said the economist.

In the near to medium term, ICRA anticipates that the trend will continue, with overall home finance growing by 12–14% yearly, helped by strong demand.

The demand for homes has increased to an unprecedented level over the last two years, especially in the wake of COVID, according to Aakash Ohri, Jr. Managing Director of DLF Home Developers.

This increase highlights how people’s views on homeownership have fundamentally changed and how important it is to have a place to call home more than ever. In addition to providing a haven for end users, residential real estate has become a desirable place to invest, the speaker claimed.

Ohri went on to say that favorable government policies, alluring financing choices, and the public’s growing ambitions toward homeownership are some of the reasons for the extraordinary rise in home loan advances.

According to Mohit Jain, Managing Director of Krisumi Corporation, purchasers are giving priority to designated workspaces and comfortable living rooms, and demand for large homes has genuinely surged.

“We are witnessing a surge in interest for properties with separate home offices and outdoor space features that were once regarded luxuries, but are now essential for the modern homeowner,” he stated.

According to Jain, there is still a very bright future for the property sector, which means that house loan growth will probably likewise continue to be robust.

According to realtors, the industry is most likely in the second or third year of a protracted up cycle. Real estate trade associations CREDAI and NAREDCO have been pleading with the government to raise the tax breaks on home loans in order to further stimulate the demand for housing. They are asking for an increase in the deduction allowed for interest paid on home loans from the existing Rs 2 lakh to Rs 5 lakh.

The post Last two years have seen an increase in home loan outstanding of Rs 10 lakh crore: RBI data – ET RealEstate appeared first on .

According to the Draft Red Herring Prospectus (DRHP), the proposed IPO consists of an offer for sale (OFS) of Rs 4,000 crore by promoter BCP Topco VII Pte Ltd, an affiliate of Blackstone Group Inc., and a new issue of equity shares valued at Rs 1,000 crore.

At the moment, BCP Topco owns 98.72% of Aadhar Housing Finance.

Aadhar Housing Finance received its observation on April 5th, according to an update from the Securities and Exchange Board of India (Sebi), after submitting preliminary IPO papers to the markets regulator in February.
According to Sebi’s observation, the IPO can now be floated.

According to the draft papers, the business plans to use the Rs 750 crore in proceeds from the new issuance to cover future capital needs for further lending. Some of the funds would also be used for general corporate reasons.

Aadhar Housing Finance provides a variety of mortgage-related loan products, such as loans for the acquisition and construction of commercial real estate, home improvement and extension loans, and loans for the purchase and construction of residential real estate.

The company is a retail-focused HFC that specializes in low-income housing, catering to consumers who are low-to-middle-income and economically disadvantaged and who need small-ticket mortgage loans.

As of September 30, 2023, it has a network of 471 branches, including 91 sales offices.

The business gains from Blackstone’s assets, connections, and knowledge as one of the top investment firms globally.
In January 2021, Aadhar Housing submitted draft documents to Sebi to raise Rs 7,300 crore through the sale of initial shares.

Although it secured the regulator’s approval to go public with the issue in May 2022, it chose not to proceed with the launch.

The book-running lead managers for the issue are ICICI Securities Ltd., Citigroup Global Markets India Pvt Ltd., Kotak Mahindra Capital Company Ltd., Nomura Financial Advisory and Securities (India) Pvt Ltd., and SBI Capital Markets Ltd.

The post Sebi approves Aadhar Housing Finance’s Rs 5,000 crore initial public offering. appeared first on .

Anuj Puri, Chairman – ANAROCK Group

With the fundamentals of the Indian economy remaining strong despite all global headwinds and inflation well under control, the RBI once again decided to keep the repo rates unchanged at 6.5%, thus extending the festive bonanza that it gave to the homebuyers in its last two policy announcements. Thus, homebuyers retain their advantage of relatively affordable home loan interest rates.

If we consider the present trends, the housing market has been unstoppable, and unchanged home loan rates will help maintain the overall positive consumer sentiments. Given that housing prices have risen across the top 7 cities in the last year, this breather by the RBI is a distinct advantage to homebuyers.

As per ANAROCK Research, 2023 saw average housing prices rise by anywhere between 10-24% in the top 7 cities, with Hyderabad recording the highest 24% jump. The average prices in these markets stood at approx. INR 7,080 per sq. ft., while in 2022 it was approx. INR 6,150 per sq. ft. – a collective increase of 15%.

Going forward, we can expect the momentum in housing sales to continue, significantly aided by the unchanged repo rates which will keep home loan interest rates attractive and also signal the ongoing robustness of India’s positive economic outlook.

The post Stable Repo Rates to Keep Residential Momentum Going appeared first on .

emand for homes in both the budget and luxury categories has been fueled by rising disposable incomes and increased aspirations.

According to the State Level Bankers’ Committee (SLBC) – Gujarat’s most recent report, house loan disbursals in the December quarter of FY 2024 were Rs 18,967 crore, a 71% increase over the same period the previous year. Since FY 2020, this is the largest disbursal that has occurred in the previous five years.

The increase in disbursals, according to bankers, can be attributed to the growing demand for residential real estate and the merging of HDFC and HDFC Bank, which has steadily increased the housing finance portfolio over the last three quarters.

“There is undoubtedly a strong demand for new dwellings. It is a tax-saving alternative in addition to being a wise investment. Certainly, well-paid young professionals are making an investment in purchasing their own homes.

These are some of the main drivers of the increase in housing finance disbursals. A senior official from SLBC Gujarat requested anonymity. “In the meantime, the merger of HDFC and HDFC Bank has added a fresh chunk of portfolio of disbursals as is reflected in the past three quarters,” the official stated.

In an update on its home loan business in India, HDFC Bank stated that following the merger, the bank’s market share has increased by roughly 18% to 20% on incremental disbursals.

In the six months following the merger, it has demonstrated strong and steady double-digit year-over-year growth throughout its home loan business. A broader distribution network has contributed to the increase in sales turnover.

Additionally, there has been a 67% increase in the number of home loan takers from 1.29 lakh in the third quarter of FY 2023 to 2.16 lakh in the same time this fiscal year. Experts in the real estate industry credit the surge to positive sentiment and strong demand for products in the premium market.

Experts in the real estate industry credit the surge to positive sentiment and strong demand for products in the premium market.

The executive director of Knight Frank India, Balbir Singh Khalsa, stated: “Primary sales in Ahmedabad have doubled over the last two years, accompanied by a consistent rise in prices.

One of the main sources of funding for homebuyers is home loans, and the significant increase in disbursals is consistent with the market’s activity and interest from home buyers.

Furthermore, market volumes have been driven by the premium sector products’ or higher value flats’ sales rise, which is subsequently increasing bank disbursals even more.”

Dhruv Patel, president of Credai Ahmedabad, expressed a similar opinion when he stated, “Over the next few quarters, there will be a positive demand for residential real estate.” Even the supply of new schemes is increasing in response to demand. There is a strong demand for both expensive and well-located properties.”

Additionally, experts predict a steady demand until 2024. “Homebuyer interest continues to remain strong and should be able to sustain the demand in 2024 especially as inflation eases and with interest rates expected to taper off and possibly reduce during the year,” according to an industry professional.

The post Report: 71% of house loans in Gujarat were taken out in Q3FY24. appeared first on .

Aadhar was purchased by private equity firm Blackstone in 2019 for roughly $300 million as a result of the group’s wager on the rising demand in India for finance and affordable housing.

The IPO is Aadhar’s second attempt at listing following the cancellation of a $1 billion plan in 2022 due to market turbulence following the conflict between Russia and Ukraine.

According to these sources, Aadhar intends to submit its IPO paperwork to India’s market regulator in the upcoming two weeks.

In the midst of record-high stock markets in India—a rare bright spot for international investors—a deal would be the most recent instance of private equity investors seeking to sell off portions of their businesses.

A rapidly expanding economy and promises of political stability are driving the nation’s record-listing intentions at the moment. Its benchmark index, the Sensex, is trading close to record highs, and its stock market recently surpassed Hong Kong’s to become the fourth largest in the world.

“Blackstone intends to sell a portion of its holding to profit from the current state of the market. Since the IPO plan is still confidential, one of the two sources, who wished to remain anonymous, stated that timing is crucial for a progressive sell-down.

As consultants for its most recent initial public offering (IPO) filing, Aadhar has enlisted investment banks Citi, Nomura, and India’s Kotak and ICICI. The sources stated that a Mumbai listing is anticipated by May.

Citi, Nomura, and Blackstone all declined to comment. Aadhar, ICICI, and Kotak did not reply to requests for comments.

Aadhar provides house loans up to $18,000 to individuals with as low as $75 monthly income in a nation where escalating real estate costs have made major city property ownership more and more challenging.

According to the company, “economically weaker sections and low-income groups” receive the majority of its loans.

Although state-owned and private banks account for the majority of mortgage loans in India, more recent private equity-owned companies are vying for market dominance. In recent years, investors like Morgan Stanley and Warburg Pincus have placed bets on the industry.

Aadhar claims to oversee $2 billion in loans across 20 Indian states and 479 offices. According to its annual report, during 2022–2023 its net profit increased by 22% to $65 million, while its total income increased by 18% to $245 million.

The post Sources: Aadhar Housing Finance aims for an India IPO of $600 million. appeared first on .