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LIC Housing mulls loan securitisation

Our Bureau

CHENNAI, Dec. 24

LIC Housing Finance Ltd is working on another securitisation deal, under which it would sell its loan portfolio to some other agency, such as the National Housing Bank or any other financial institution.

The deal would be put through in the next six months, Mr A.K. Gangooly, General Manager, LIC Housing, said. However, he did not mention the quantum of money that may be raised through securitisation.

Last year, LIC raised Rs 40 crore by selling a stock of some 2,780-odd individual loans to the NHB. This, it was then said, was more experimental in nature.

Now that the `experiment' is seen to be successful, the company is working on the second round of securitisation.

Speaking at the inauguration of LIC Housing Finance-organised `Ungal Illam 2001', a property exhibition, Mr Gangooly said that the company would need more funds in order to meet the growing demand for housing loans.

Last year, the company sanctioned loans of Rs 1,312 crore, against the year's target of Rs 1,180 crore, he said.

For the current year, the target has been fixed at Rs 1,785 crore, and the sanctions till the end of November amount to Rs 1,050 crore.

Mr Gangooly said that LIC Housing was in principle not averse to buying loans from smaller housing finance companies, but has not considered any proposal seriously so far.

LIC Housing was set up in 1989. Its loan portfolio was about Rs 4,800 crore.

With an equity capital of Rs 75 crore and net worth of Rs 616 crore, its capital adequacy works out to 11.5 per cent.