LIC Housing Finance says looking at securitisation of NPAs

LIC Housing Finance has said that it would look at securitisation of its non performing assets (NPAs) this year if the tax and stamp duty issues are adressed.

Speaking to reporters after inaugurating a property fair in Chennai, Sunita Sharma, managing director and CEO of LIC HFL said, "We have not done it (securitisation of assets) for many years. We will be looking at it this year but the quantum will not be high. We will be looking at Rs 4,000-5,000 crore."

She said that the company could not go for securitisation last year because of tax and stamp duty related issues.

Sharma though clarified that the company is yet to start the process.

Through securitisation of loans, the company could sell its portfolio of loans to a buyer, transferring the loan from its balance sheet to the latter's portfolio.

The company is also looking at e-auction of properties recovered due to non-payment of loans. As part of this, it has entered into a memorandum of understanding with MSTC Ltd and has put around 14 properties with a total value of less than Rs 2 crore on sale through e-auction this month.

It is also targeting a loan disbursal of Rs 38,000 crore during the current fiscal, compared to Rs 30,000 crore last year. Another Rs 3,000 crore would be disbursed in the corporate segment.

LIC Housing has also set a target to raise Rs 43,000 crore through borrowings this year, of which around Rs 23,000 crore has already been raised so far.

Sharma said that the company's average cost of fund is around 9.34% and its main fund source, the non-convertible debentures, are of higher cost than some of the other sources.

NPAs in the retail sector as on March 31, 2015 were 0.24%, while in the corporate sector, there were only three NPAs totaling to Rs 300 crore, she said.

The company, which has its offices in Dubai and Kuwait, would also look at expanding its presence to other overseas destinations through representative offices, added Sharma.