PNB Housing Finance Limited said on Monday it has raised 100 million dollars (about Rs 690 crore) from International Finance Corporation, a member of the World Bank Group, for on-lending to buyers in affordable housing projects.
The investment was made under the Reserve Bank of India’s (RBI’s) automatic route in the revamped external commercial borrowings (ECBs) framework. India needs to build 1.1 crore homes in the affordable segment. At an average of 4.6 people per household, the 1.1 crore units gap implies that nearly five crore people do not have adequate housing.
“We express our gratitude to IFC for their continuous support and trust in the company’s operations and overall robustness,” said Sanjaya Gupta, Managing Director of PNB Housing Finance Ltd.
“The fully-hedged facility has come at a landed cost that is much lower than the domestic pricing for similar tenures. Raising of ECB under the present market environment and that too from a multilateral financial institution like the IFC demonstrates the strength of PNB HFL and the faith of the lending community in the sector,” he said in a statement.
“The line of credit will not only enhance the liquidity but will further balance our long-term asset liability management position as the facility is for five years,” Gupta said.
This is the first ECB disbursement during the current financial year under the RBI automatic route. Several other ECB proposals are in the pipeline.
“The RBI has allowed us to borrow ECB up to 750 million dollars annually under the automatic route. Considering the strong fundamentals and inherent growth of the company, we are hopeful that in the coming months our company will further utilise the facility,” said Gupta.
Hemalata Mahalingam, Manager of Financial Institutions Group at IFC South Asia, said: “To support the Indian government’s vision of Housing for All by 2022, our country strategy places a strong emphasis on the affordable housing sector. Our partnership with PNB Housing Finance will help them further expand to smaller towns and cities and reach low-income customers with loans to buy homes and help raise their living standards.”
PNB Housing Finance is IFC’s long-standing client. IFC assisted the company in raising its first foreign exchange financing for on-lending to buyers of affordable housing. Later, IFC helped the company to issue the first green bond in India for financing construction of green buildings.
The company is a member of IFC’s Sustainable Housing Leadership Consortium that brings together leading developers, financiers, and the government to support the ecosystem for construction of green homes.
Source: thedispatch
