Sundaram BNP Paribas Home Finance, in a bid to fund its business expansion, is planning to raise Rs 3,500 crore in the current financial year through a mix of instruments.
“We plan to raise funds through a mix of term loans from banks, refinance from National Housing Bank (NHB), NCDs, subordinated debt, fixed deposits and commercial papers,” said Srinivas Acharya, MD, Sundaram BNP Paribas Home Finance.
Sundaram BNP Paribas Home Finance’s funding profile is fairly diversified with NHB refinance and debentures constituting 31% and 33% of the total borrowings, respectively, as on March 2018. Fixed deposits contribute 15% to the funding mix. The company has a deposit base of Rs 1,042 crore and there was a gross addition of Rs 387 crore, last year.
Recently, rating agency Icra has upgraded Sundaram Home Finance’s fixed deposit rating to MAAA (stable) from MAA+. The outlook on the long-term rating was reaffirmed at AA+ Stable. The ratings continue to factor in the strong parentage with Sundaram Finance and BNP Paribas Personal Finance and their demonstrated operational, managerial and financial support to Sundaram Home Finance. The ratings also consider the company’s established franchise in South India, its experienced management team, track record in housing finance, comfortable capitalisation and the diversified funding profile.
Sundaram BNP Paribas Home Finance has revised, upwards, the interest rate on fixed deposits by 50 bps across all tenures. Senior citizens would now get 8% for 12/18-month deposit, 8.25% for 24/36-month deposit and 7.75% for 48/60-month deposit. Trusts would now get interest @ 8.25% for a 36-month deposit.
Over the medium term, the company aims to continue to focus on the southern states and increase penetration in its existing areas of operations. The company has over 110 branches spread across the country and over 50,000 customers. Sundaram BNP Paribas Home Finance is a joint venture between Sundaram Finance (50.1%) and BNP Paribas Personal Finance (49.9%).