Sundaram BNP Paribas Home Finance, a 50.1:49.9 joint venture between Sundaram Finance and BNP Paribas of France, has plans to raise close to R4,000 crore from multiple sources in the

current financial year. The borrowing is intended to meet the loan disbursal requirements of the Chennai-based firm.

The home loan company is targeting disbursements of R3,100 crore for FY14.

The company?s FY13 loan disbursements stood at R2,572 crore.

Sundaram BNP Paribas Home Finance managing director Srinivas Acharya said, ?We expect to raise R3,950 crore in the current financial year, including around R1,250 crore from National Housing Bank (NHB), R1,500 crore from the debt market, R300 crore from other banks and R800 crore from commercial papers, besides public deposits.?

The company which currently has an asset base of R6,000 crore had raised R3,050 crore last fiscal, of which R600 crore was from NHB. ?We are increasing our borrowings from NHB to 32% of our overall borrowings from the current 20%. The housing apex bank gives us a 15-year window too,? he said.

On fund raising challenges, Acharya said, ?The availability of long-term fund continues to be a critical problem for the home finance sector. With the exception of refinance provided by NHB, all other borrowing sources do not go beyond three years. There is an immediate need for housing finance companies to source long-term loans and we earnestly hope the government will make more financial institutions come forward to lend to HFCs

for longer tenures to avoid asset-liability mismatches in future.?

In FY13, the company had infused equity capital of R100 crore together from Sundaram Finance BNP Paribas. ?This year also, we expect R100 crore from both the partners.? Pointing out that the sector is likely

to grow 20% this year, he said the company has set a target to grow at better than industry rate.

On the outlook for FY14, Srinivas Acharya said, ?We continue to believe the south market still holds a lot of potential and gives us an opportunity to grow by targeting the untapped Tier 2 and Tier 3 towns. In addition, we are confident of gradually increasing the Home Loan contribution from non-South markets where we have established a presence and made small inroads in the last 2years.?

The housing finance company is also looking at foraying into project financing. It has already initiated talks with a number of builders and has collected data around the realtors. Acharya said that the rating of building projects by rating agencies help create confidence amongst the real estate buyer as well as assist HFCs appraise a project better. Indian Mortgage Guarantee Company providing guarantee on a risk sharing basis to the HFCs and the housing loans portfolio of banks will lead to better rating for the housing finance portfolio in the country.