Indiabulls Housing raises $100 million via offshore loan from SBI

Indiabulls Housing Finance (IBHF) has raised $100 million from State Bank of India through the
external commercial borrowing (ECB) route.
The five-year loan has been priced after adding 275 basis points over the Secured Overnight
Financing Rate, a global rate gauge, people involved in the capital raising said.
The fundraise, which comes amid volatile market conditions, is expected to help the home
financier expand into lending for the low-income – or affordable – housing segment, one of the
people said. IBHF has over 151 branches in India

IBHF and SBI did not respond to requests for comment till press time Thursday.
The total cost of the loan is 4.25% without considering currency risk cover.
The home loans provider is expected to hedge the loan as it does not have any opportunity to
lend offshore after raising money from overseas. The company may also tap local bonds to
raise funds, sources said.
“The ECB will finance a large portion of affordable housing over a long period,” an investment
banker said.
Interest rates are heading north across the world, as the US Federal Reserve is expected to
accelerate its pace of rate hikes to tame local inflation, which hit a 40-year high in US.
“Slippages in the real estate segment resulted in a moderation in IBHF’s asset quality, though
the healthy performance of the retail segment offset the impact on an aggregate basis to a large
extent,” ratings agency ICRA said in a note in April.
ICRA rated Indiabulls Housing ‘AA’ on its home turf, which makes it a high-yield paper in the
offshore market.
However, the ratings grade is more relevant for bond sales.
The housing finance company reported a 10.5% fall in assets under management to Rs 72,211
crore in the January-March quarter.
In the past one month, IBHF shares have fallen by about 18% compared with a a 5% drop in the
Sensex, the broader market gauge.