LIC Housing Finance (LICHF) on Monday announced its plan to raise over Rs 500 crore in the next 2-3 months to enhance equity capital as it aims for a 28 per cent year-on-year growth in business for the next three years.
The company has registered a 53.26 per cent jump in net profit at Rs 116.37 crore for the quarter ended September 30, compared to Rs 75.93 crore a year ago.
"The company is now poised to move into the next level of growth and performance. Therefore, we require more capital. We are planning to raise in excess of Rs 500 crore by end of December or in January," LIC Housing's Director and Chief Executive S K Mitter told reporters in Mumbai.
The structure of the issue is yet to be finalised, he said, adding that Qualified Institutional Placement (QIP) looks the best alternative as per the current market conditions.
"We are still in discussion with the merchant bankers, whom we plan to rope in for the issue," Mitter said when asked whether the company intends to go for a follow-on offer.
LICHFL is in talks with the parent company, LIC, which owns 40.46 per cent stake in the company, to determine the percentage of stake it would dilute through the offer.
The company has a comfortable capital adequacy ratio (CAR) position of 16 per cent as on September 30, 2007 as against the regulatory requirement of 12 per cent.
LICHFL's cost of funds, as on September 30, stood at 8.55 per cent as against 8.63 per cent at the end of the first quarter of the current fiscal.
Net Interest Income (NIM) of the company is at 3.21 per cent against 2.34 per cent at the end of the first quarter. Mitter said LICHFL aims to increase its business by 25- 28 per cent year-on-year in the next three years.
Total income of the company increased by 36.84 per cent to Rs 526.58 crore for the quarter under review against Rs 384.80 crore for the corresponding period last year.
The company, which targets to disburse Rs 6,250 crore during the current fiscal year, has disbursed Rs 1,599 crore in the second quarter of the fiscal.
It targets to sanction loans amounting to Rs 6,800 crore during the current fiscal. In the second quarter, the company sanctioned Rs 2,268 crore.
The gross NPA of the company declined from 3.75 per cent as on September 30, 2006 to 2.84 per cent as on September 30, 2007. The net NPA of the company stood at 1.65 per cent at the end of September.