Companies & Sectors
LIC Housing plans to raise up to Rs1,000 crore through ECB route

LIC HF has formed a committee comprising senior officials which is in touch with the apex bank on the ECB issue

Hyderabad: LIC Housing Finance Ltd, promoted by state-run insurance giant Life Insurance Corp of India (LIC), is mulling raising Rs700-Rs1,000 crore through external commercial borrowings (ECB), reports PTI quoting its chief executive VK Sharma.

 

Last month, the Reserve Bank of India (RBI) allowed real estate developers and housing finance companies to raise up to $1 billion through external commercial borrowings (ECBs) in the current fiscal to promote low-cost housing projects.

 

Sharma said a committee comprising senior officials of the company has been formed which is in touch with the apex bank on the ECB issue.

 

"We expect that we will be in that segment which has been permitted by the RBI. We expect that we will be raising somewhere around Rs 700-Rs1,000 crore. We will apply for that," Sharma said on the sidelines of a two-day property exhibition.

 

ECBs are considered attractive as cost of raising the loan overseas is lower than that of domestic borrowings. Besides, they provide an additional avenue to access large amount of funds from global financial markets.

 

To a query on when the company would raise ECBs, Sharma said: "I cannot comment on that. Board resolution is there in place. We have created a committee at company level and they are in touch with RBI."

 

He said LIC Housing Finance (LICHFL) is expected to complete the institutional placement offer by fiscal end.

 

The qualified institutional placement (QIP) was delayed due to variety of reasons, including volatility in the markets, he added.

 

Though he did not mention the exact amount being raised through QIP, a senior official earlier told PTI it is hoping to raise up to Rs1,200 crore through the proposed issue of new shares.

 

LIC, which is promoter of LICHFL, currently holds 40.31% stake in the company. While institutional investors, both foreign and domestic together, are holding 41.47% shares, others hold 18.22% shares.

 

The merchant bankers appointed for the issue include Nomura, Kotak Securities, HSBC, Citigroup and Avendus Securities, according to the official said.

 

Parent LIC's stake in the company currently stands at 40.31%, which will come down to the 36.54% level after the issue.

 

LICHFL, which is now charging 10.25% interest on home loans, will wait for Reserve Bank of India's policy review slated for January 29 before taking a decision on revising interest rates, Sharma said.

 

Last year, the company disbursed Rs20,000 crore loans and is targeting Rs25,000 crore this year, he added.

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General insurance industry may grow by 20% annually

The penetration of the general insurance in India stands at around 0.7%, lower than the global average of 1.5 to 4%

Mumbai: The Indian general insurance industry is likely to grow by around 20% per annum in the coming years because of increasing penetration, reports PTI quoting a top official of New India Assurance.

 

"Despite slowdown in economy, the general insurance industry has grown by around 20% in the recent past. We hope the industry will see similar growth in the coming years," Chairman and Managing Director of New India Assurance G Srinivasan said.

 

The penetration of the general insurance in India stands at around 0.7%, lower than the global average of 1.5 to 4%.

 

Recently, the finance ministry had asked the industry to come up with proposals for increasing the penetration.

 

As to the total premium, Srinivasan said it should go up by at least four times in the next 10 years.

 

Presently, the total premium of the industry is around Rs60,000 crore, with a growth of around 20% per annum.

 

About major challenges before the industry, Srinivasan said it will have to reduce the underwriting losses.

 

New India Assurance, the largest general insurer of the country, crossed Rs10,000 crore mark in premium collection in the last financial year and aims to touch a global premium of Rs12,000 crore in the current financial year.

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SEBI allows market entities to verify QFI's PAN via I-T website

The move will ease the process of obtaining PAN card details from QFIs but they will have to submit alternative identity proof

Mumbai: Securities and Exchange Board of India (SEBI) allowed the market entities to verify the permanent account number (PAN) of qualified foreign investors (QFIs) through the Income Tax (I-T)Department's website, as against the current practise of asking for their original PAN card, reports PTI.

 

The move will ease the process of obtaining PAN card details from QFIs but they will have to submit alternative identity proof.

 

A qualified foreign institutional (QFI) investor is an individual, group or association resident in a foreign country that is compliant with Financial Action Task Force (FATF) standards. QFIs do not include FIIs/subaccounts.

 

"With a view to bring about operational flexibility and in order to ease the PAN verification process, the intermediaries may verify the PAN of their clients online at the Income Tax website without insisting on the original PAN card, provided that the client has presented a document for Proof of Identity other than the PAN card," SEBI said in a circular.

 

Individual foreign investors and trusts that invest directly in the capital markets need to acquire a PAN, a mandatory requirement for all tax payers.

 

The circular has been sent to stock brokers, depository participants, mutual funds, portfolio managers, KYC Registration Agencies, Alternative Investment Funds and Collective Investment Schemes, among others.

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