The proposed joint venture is expected to focus on low-cost housing projects
Mortgage lender Dewan Housing Finance plans to float a housing finance subsidiary targeting the low-income segment in a joint venture partnership with International Finance Corporation (IFC).
The joint venture, in which Dewan Housing will have around 80% stake, is expected to become operational in the next few months. Both companies are likely to jointly announce the venture in the next few days, reports PTI.
“DHFL will have a majority holding in the company. The equity holding of IFC in the JV will be 20%. The idea of floating the JV is to focus on the low-income segment, where we see a great potential to explore,” Dewan Housing’s CMD Kapil Wadhawan told reporters.
The proposed company, which will focus more on States where low-income population is more, plans to disburse loans up to Rs5 lakh and would target those whose monthly income is as low as even Rs3,500-Rs4,000, Mr Wadhawan said.
DHFL is currently in the process of applying for the required regulatory clearance from the National Housing Bank, he said.
Recently, Kerala-based Muthoot Pappachan Group had announced its plans to set up a home-loan subsidiary in the affordable housing segment and is expected to seek the necessary regulatory clearance for the project soon.
Presently, DHFL has a total asset-base of around Rs10,000 crore and a customer base of Rs1,75,000 crore. In FY10, the company disbursed Rs3,500 crore worth of loans and has targeted to take this number to Rs5,000 crore in FY11, Mr Wadhawan said.
DHFL expects to take its total asset-base to Rs25,000 crore by 2013 from Rs 10,000 crore at present, he said.
The mortgage lender also has plans to apply for a banking license when the Reserve Bank of India announces its guidelines in this regard, he said.
“We will stake a claim for a banking license. This is just a natural progression for us (to enter the commercial banking space),” Mr Wadhawan said.
With a view to fund its expansion plans, DHFL plans to raise around Rs 5,000 crore of capital in the current fiscal. Out of this, the company plans to raise Rs 500 crore equity in the next few weeks, he said. The rest of the amount will be raised as debt through various instruments.
Mr Wadhawan added that a likely rise in the RBI’s key rates is expected to put an upward pressure on interest rates in the industry in the near future.