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Tata Capital Housing Finance Ltd (TCHFL), the mortgage lending arm of the Tata group, is planning to raise up to Rs 3,500 crore through non-convertible debentures (NCDs) to support business growth.
TCHFL, a subsidiary of Tata Capital Ltd, being part of the Tata group, enjoys good financial flexibility and has access to funds at competitive rates of interest from various sources, rating agency ICRA said. The rating agency has assigned an “AAA” rating to the proposed NCDs offering.
The loan book of the company as of the end of March was Rs 51,402 crore.
Typically, the banking regulator considers non-banking financial companies (NBFCs) with over Rs 50,000 crore loan books in the upper layer in the scale-based regulation framework. Such inclusion comes with enhanced regulatory oversight and the listing of shares on exchanges.
TCHFL has diversified its funding sources with a mix of non-convertible debentures (NCDs), bank borrowings, and commercial paper, according to ICRA.
The company declined to comment on queries relating to NCDs, business plans, and the prospects of it being included in the Reserve Bank of India’s (RBI) list of upper-layer non-banking finance companies.
According to its annual report for FY24, the company raised Rs 5,429 crore through secured NCDs via private placement. The aggregate debt outstanding as of March 31, 2024, was Rs 47,271 crore, of which Rs 14,302 crore was payable within one year. Its debt-to-equity ratio as of March 31, 2024, was 7.27 times.
TCHFL disbursed loans amounting to Rs 26,341 crore in FY24 as against Rs 17,338 crore in FY23. Its loan portfolio grew by 39 per cent year-on-year (YoY) to Rs 51,402 crore as of March 31, 2024, from Rs 36,917 crore as of March 31, 2023.
The mortgage lender’s retail finance loan portfolio (RF), comprising home loans and loans against property, grew to Rs 42,391 crore from Rs 30,580 crore a year ago. The company also provides construction finance (CF) to real estate developers in select Tier-I and Tier-II cities. The CF portfolio rose to Rs 9,011 crore at the end of March 2024 from Rs 6,337 crore at the end of FY23. CF contributed significantly to TCHFL’s profitability by maintaining strong net interest margins and improving fee income on the back of higher volumes driven by a growing client base.
First Published: Aug 16 2024 | 8:16 PM IS