World Bank Group member International Financial Corporation (IFC) has proposed a $250 million senior debt investment in Housing Development Finance Corporation (HDFC), India’s largest mortgage financier.
In a disclosure, IFC said the loan proceeds will be used to provide retail buyers financing for affordable housing with a mutually agreed portion of IFC funding to be earmarked for green affordable housing.
HDFC, which is listed on India’s BSE Ltd. and the National Stock Exchange (NSE Ltd.), is the first specialised housing finance company in India.
Incorporated in 1997, it is involved in providing finance to individuals and developers for the purchase, construction, development, and repair of houses and commercial properties in India.
According to IFC’s disclosure, HDFC has financed over 8.1 million units cumulatively to date. It has also evolved into a financial conglomerate with subsidiaries and associates in financial services segments such as banking, insurance, and asset management.
Last year, the Insurance Regulatory and Development Authority of India (Irdai) approved HDFC’s 51.2% acquisition of Apollo Munich Health Insurance, a joint venture between Apollo Hospitals and German reinsurer Munich Re Group.
IFC said its proposed A-loan is in line with the Government of India’s “Housing for All by 2020” initiative, IFC said.
“The most significant, expected project-level outcome is increased access to financing for affordable housing for lower and middle-income segments,” according to the international lender.
The proposed investment will also support HDFC in gradually growing its nascent green housing portfolio. On the non-financial aspect of the investment, IFC aims to provide knowledge and capacity building to develop HDFC’s sourcing capabilities and pipeline development activities.
“IFC anticipates that the investment, together with other IFC’s efforts in the segment, will help promote greater competitiveness in affordable housing financing via demonstration and replication channels,” it added.
HDFC currently has a distribution network of 593 interconnected offices in India. It also has three representative offices in Dubai, London, and Singapore offering home loan products to non-resident Indians and persons of Indian origin.