Dewan Housing Finance Corporation Ltd, (DHFL) has held plans to raise around Rs 240 crore through qualified institutional placements (QIP) and preference shares.
Instead, the company may take the private equity route. Keeping in mind the current market volatility, it may evaluate raising a smaller amount, of around Rs 150-200 crore.
“We have deferred our plans of QIP given the overall market situation at present,” Kapil Wadhawan, vice-chairman and managing director, DHFL, told DNA Money.
“The company is currently in the process of evaluating other options, which could be a private equity route. The PE route offers stability and by nature a PE investor remains with a company over a 5-7 year time frame” he added.
Wadhawan said the company is “adequately capitalised at around 15.5%”.
Currently, private equity player Caledonia Investments holds a 14.9% stake in the company. DHFL is in talks with other PE players and expects to draw up a good premium and wrap up the deal soon. Caledonia Investments could also add to its holding in the company, provided it keeps its stake below 15%, according to regulatory norms.
With a 25% growth rate, the private housing financer has been beefing up both its domestic and overseas presence. It will be opening an office in London this month and has tied up with the UAE Exchange in Abu Dhabi to cater to the Middle East market.
Back home, DHFL has entered into a tie-up with Punjab and Sind Bank for distribution of its home loans in Punjab, Haryana and Chandigarh, through the bank.
“We have closed the fiscal with a 25% growth and crossed the Rs 4,000-crore mark on assets under management,” Kapil Wadhawan, vice-chairman and managing director, DHFL, told DNA Money. “Incremental lending has been around Rs 1,900 crore. In the next three years, we wish to take our assets under management to Rs 10,000 crore,” he added.
DHFL, which primarily lends to the lower and middle-income sector in Tier 2 towns, plans to expand its branches to 100 by March 2009. “These smaller towns are underserved, much in the clutches of money lenders or co-operative banks which charge higher interests. The target clientele is also much isolated from various issues that affect housing in bigger cities and metros”, Wadhawan told DNA Money.
Source: DNA India