MUMBAI: Non-banking finance company Indiabulls Housing Finance has raised Rs 23,615 crore in the past two months through a combination of debt instruments and loan portfolio sales, the move aimed at maintaining high levels of cash.
A perceived crisis has shaken investor confidence on the para-banking sector since September, when infrastructure conglomerate IL&FS defaulted on a series of debt repayment commitments.
The NBFC has raised the sum since September 21 this year through various debt instruments, securitizations and sanctions, the company said in a note to stock exchanges.
Indiabulls has sold long-term debt papers to raise nearly three-fourths of the total amount at Rs 17,410 crore.
“The quantum of the fund raising is in line with the companys objective of maintaining high liquidity and sustainable growth,” it said.
The company had to incur higher costs as the overall borrowing expenses rose for non-banking entities in the past two-three months through different bond sales.
"For Indiabulls Fin, the average differential with the government benchmark bond yield has risen to about 175 basis points compared with 75 basis points three months earlier," said a domestic investment banker, who was involved in the bond sales.
About Rs 1 lakh crore worth of commercial papers (CPs) sold by NBFCs are up for redemption this month.
With a view to alleviate the pressure of redemption faced by certain mutual funds, in these last two months, the company has bought back Rs 5,430 crore and Rs 650 crore worth of CPs and bonds, respectively. ET earlier reported that Indiabulls, DHFL, and JM Financial were buying back debt securities.
Buybacks are normally aimed at building up investor confidence at a time when they feel higher risk of defaults. Crisil and ICRA rated Indiabulls Housing triple-A, the highest grade.
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