ICICI Bank In Due Diligence For Maharishi Hsg Fin Buy

Mumbai, May 28: | Updated: May 29 2003, 05:30am hrs
ICICI Bank, which has emerged as an aggressive player in housing finance, is carrying out due diligence for acquiring the housing finance business of the Maharishi group. The Maharishi group is promoted by the UK-based Maharishi University of Management.

Maharishi Housing Development Finance Corporation (MHDFC), the housing finance arm of the group with a Rs 104-crore corpus, is expecting a premium of about 4 to 8 per cent for its housing finance business.

ICICI Bank is currently carrying out a due diligence for the same, sources said. Consequent to the due diligence process, the bank will decide on how much it will aqcuire from MHDFCs portfolio of Rs 104 crore, a top official of ICICI Bank told FE. It will take a month, the official added.

An MHDFC top official said: Currently, we are in talks with various players, and once the task of selling the entire loan portfolio is over, we will build a new portfolio.

The MHDFC official said: The key reason for the sale of the entire loan portfolio is to reduce the cost of funds. We will continue to be in the housing finance business and build a new portfolio with low interest.

Unlike other housing finance companies, MHDFC, besides housing loans, offers free advice for Vaastu consultancy.

The company, with its head office in New Delhi, has a paid-up capital of Rs 20 crore, which is almost owned by the Maharishi University of Management.

MHDFC has about 15 branches spread across the country.

The company was established in 1997 and is a part of the global network set up by Maharishi Mahesh Yogi.

Currently, ICICI Bank is one of the frontrunners in the housing finance sector with a 30 per cent market share. As against the monthly (March 2003) industry volume of Rs 3,500 crore, ICICI Banks portfolio was at Rs 1,070 crore. In the fiscal ended March 31, 2003, ICICI Banks housing loan portfolio was at Rs 9,220 crore, reflecting 48.2 per cent of its total retail portfolio of Rs 19,132 crore.