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IIFL Home Finance has raised $50 million in debt from US International Development Finance Corp. (DFC) to enhance its affordable housing finance portfolio with a special focus sustainable housing,
Monu Ratra, chief executive of IIFL Home Finance, told ET that the fund was raised at a discounted rate of 5.72%, which includes hedging costs.
Its average cost of funds is 8.4%.
The deal reflects the growing confidence shown by foreign investors on India’s affordable housing sector, which is growing rapidly with the government’s focus.
The mortgage lender is raising debt for the second time this year. In January, it raised $68 million from the Asian Development Bank.
“Foreign investors, especially development financial institutions, see affordable housing as an area that can have the greatest impact in developing countries. Therefore, it is important for them to invest here while building sustainable cities and communities. Coincides perfectly with their social development goals. Taking climate action,” Ratra said.
Last week, another mortgage lender focusing on the affordable segment, Shriram Housing Financeraised $50 million in its first ECB from the London branch of Canara Bank.
Last year, a wholly owned subsidiary of Abu Dhabi Investment Authority (ADIA) bought 20% stake in IIFL Home Finance for about Rs 2,200 crore.
mortgage lender, which is a subsidiary of IIFL Finance, caters mostly to economically weaker sections and low income groups. It had assets under management of Rs 29,595 crore at the end of June. The contribution of home loan in this is more than three-fourth. Loan against property to small enterprises and construction finance are its other lending areas.
Parent IIFL Finance last month raised $175 million in three-year external commercial borrowings from lenders hsbc and foreign branches of Bank of Baroda (Gift City) and Union Bank of India (Sydney branch), at a blended cost of 9.2%.
