Tata Capital Housing Finance NHB nod to open shop

Tata Capital Housing Finance NHB nod to open shop
Business Standard, May 20, 2009, Section II, Page 2

BS Reporter / Mumbai

Tata Capital Housing Finance Limited (TCHFL), a wholly-owned subsidiary of Tata Capital, has been registered with the National Housing Bank as a housing finance company (HFC) and is now permitted to commence business.

Incorporated with an authorised capital of Rs 100 crore of which Rs 10 crore has already been subscribed, the firm will focus on Tier I and Tier II cities. It plans to establish 35 outlets by the end of FY10.

Tata Capital already has a presence in retail finance with a products suite comprising auto loans, personal loans and property. The size of its asset portfolio is Rs 8,000 crore, which is equally divided between retail and corporate loans. “A separate subsidiary will help us consolidate and focus on our housing finance business. We intend to leverage the Tata name and the Tata Capital brand,” said Praveen Kadle, managing director, Tata Capital.

The firm will sanction loans between Rs 2 lakh and Rs 2 crore for up to 85 per cent of a property’s value. The maximum duration of loan repayment will be 240 months while the minimum will be 12 months. The firm hopes to disburse a minimum of Rs 200-400 crore worth of loans in the first year of operations and intends to match industry benchmarks in terms of interest rates.

When asked if firm was looking to grow through acquisitions, Kadle replied, “We will look at inorganic growth only if valuations make sense. The condition of the balance sheet of the HFC up for sale will also be a factor.” Kadle added the firm has not finalised any deals with Tata Housing, the property development of the Tata group. Tata Housing recently unveiled plans to develop apartments priced below Rs 4 lakh for the low-income segment at Boisar, 100 km from Mumbai.