Carlyle-backed PNB Housing Finance raises $100 mn from IFC
Photo Credit: VCCircle

PNB Housing Finance Ltd said on Monday it has raised $100 million (Rs 690 crore) from International Finance Corporation for lending to buyers in affordable housing projects.

India’s fourth-largest housing finance company by assets said in a statement it secured the capital via external commercial borrowings with a tenor of five years.

The line of credit will enhance liquidity and balance the company's long-term asset-liability management position, said Sanjaya Gupta, managing director at PNB Housing.

“The fully-hedged facility has come at a landed cost that is much lower than the domestic pricing for similar tenures,” he said.

Gupta also said that the Reserve Bank of India has allowed PNB Housing to borrow up to $750 million annually from overseas under the automatic route and that it plans to use the facility in coming months.

For IFC, the World Bank's private-sector investment arm, this adds to its bets on Indian housing finance companies this year. IFC said earlier this year it planned to provide $50 million in debt funding to affordable housing loan provider Aavas Financiers Ltd and $150 million to Piramal Capital & Housing Finance Ltd. 

“To support the Indian government’s vision of Housing for All by 2022, our country strategy places a strong emphasis on the affordable housing sector,” said Hemalata Mahalingam, manager in the financial institutions group at IFC South Asia. “Our partnership with PNB Housing Finance will help them further expand to smaller towns and cities and reach low-income customers with loans to buy homes and help raise their living standards.”

IFC had previously helped PNB Housing in raising foreign-exchange financing and in issuing the first green bond in India for financing construction of green buildings.

PNB Housing is an associate of state-run Punjab National Bank, which holds a 32.67% stake. PNB Housing also counts private equity firm Carlyle as a major shareholder with a 32.25% stake while General Atlantic owned 9.87% stake as on June-end. 

In the broader non-banking finance segment, IFC this year has led funding round in L&T Finance Ltd and a $222-million round in Cholamandalam Investment and Finance Company Ltd

Apart from lending to companies, IFC actively backs private equity and venture capital funds in India. It also has an active direct private equity-style investment practice in the country.

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