India: IFC proposes $100m senior loan to IIFL Home Finance

India: IFC proposes $100m senior loan to IIFL Home Finance

The International Finance Corporation (IFC), a part of the World Bank Group, has proposed to make an investment of $100 million in Gurugram-headquartered IIFL Home Finance Limited, per a disclosure.

The proposed investment will be in the form of a senior secured loan for a tenor of up to six years. Once approved, the funding proceeds will be used to provide retail buyers with financing for affordable housing with a focus on the low-income group, said the IFC disclosure.

Discussions are also underway for part of the proceeds to be used for financing retail purchases of green affordable housing, it added. IFC has estimated that there is a $1.4-trillion investment opportunity in green residential housing in India till 2030.

According to the lender, the housing market in India is very active with banks, NBFCs, and HFCs; however, a large portion focuses on higher income groups, while low and middle-income groups remain unserved/underserved.

The proposed investment will increase access to housing finance for economically weaker sections/low income segments, with a focus on women borrowers, it said.

IIFL Home Finance was established by IIFL Finance Limited in 2006. IIFL Finance currently holds 79.6% and acts as the promoter of the company. The company is engaged in providing loans for purchase, construction, and renovation of homes; SME secured loans for business and personal needs; and construction finance loans to developers engaged in construction of affordable homes.

Last year in August, the Abu Dhabi Investment Authority (ADIA), a sovereign wealth fund owned by the Abu Dhabi government acquired a 20.4% stake in IIFL Home Finance.

Meanwhile, IIFL Finance is owned by Nirmal Jain, who along with his family holds a 24.90% stake in the company. IIFL Finance is listed with a market capitalisation of $2.4 billion; 75.1% of the shares are floating, out of which 22.3% are owned by Fairfax Holdings.

Last December, IFC also proposed to extend a senior debt investment of $400 million to Housing Development Finance Corporation (HDFC), India’s largest housing finance company. Earlier, in October, it proposed an investment of about $35 million in Indian mortgage financier Home First Finance Company.

Edited by: Joymitra Rai

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