Sundaram Home Finance, one of the auxiliary units of Sundaram Finance Ltd., proposes to raise around Rs 2,000 crore through a combination of debt instruments and bank funding. They are planning to raise the fund in the second half of the current year.
Lakshminarayanan Duraiswamy, Managing Director of Sundaram Home Finance commented that, in the last two months, the company is experiencing the sign of growth in the housing sector. The green signal is highly visible in the Tier II towns in South India. He added that through this fundraising plan the company foresees to extend its radical presence in four southern states, especially in the Tier II and Tier III towns.
The growth rate of deposits in the first half of the year is registered as satisfactory, and at the end of September 2020; it stood at Rs. 1,742 crore. In the same period, a net accretion of around Rs. 140 crore is also reported. The home loan inquiries in October have attained the same position as in the last year, but on the other hand, the sales cycle is taking a bit longer time to maintain the same level.
From the non-metro towns, the company had witnessed an increase in demand in the first half of the year. This is the situation that led them to think about developing their business in these markets. And in turn, the company proposes to raise Rs 2,000 crore in the next six months to fund and support their growth plans.
From the perspective of home finance space, Lakshminarayanan conveyed his viewpoint that the housing segment is still under pierced in the country as the growth of this segment is at a slow pace. And they envision a growth rate in home finance space amidst COVID-19 because, in this pandemic, there will be a driving need for homeownership and thus portray growth in satellite towns.
At the end of August 2020, Sundaram Finance Ltd had reframed its interest rate on deposits across multiple tenures which include 5.75 percent (earlier 6.75 percent) per annum for 12 months, 6 percent (earlier 7 percent) per annum for 24 months, and 6.25 percent (earlier 7 percent) for 36 months.
Sundaram Home Finance is a subsidiary of Sundaram Finance Ltd. and, it had a network of 115 branches across the country that provides home loans (includes home improvement and extension loans), plot loans, and loans against property.
