InvestorQ : Why is Indiabulls Finance looking to raise Rs.5000 crore via debt securitization?
Arti Chavan made post

Why is Indiabulls Finance looking to raise Rs.5000 crore via debt securitization?

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Rutuja Nigam answered.
2 months ago
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In fact, Indiabulls Housing is look to monetize some of its receivables through the securitization route with that market showing some traction for NBFCs in the last few months. The NBFC securitization market had been silent in the recent past due to high risk levels but now investors are a lot more willing to assume the risk.

That broadly explains why Indiabulls Housing Finance is looking to raise Rs.5,000 crore through the securitisation route in the fourth quarter of the current financial year ending in March 2021. In the Dec quarter, the company managed to raise around Rs.2,000 crore via this route. In fact, securitisation entails pooling and repackaging of similar illiquid financial assets into marketable securities. Investors then invest in such securitized paper.

For Indiabulls Housing, this is critical because in normal yeas securitisation constitutes about 25% of the non-bank financier's overall borrowing and helps the company raise Rs.2,500 crore each quarter through this route. For the fiscal, Indiabulls Housing has raised Rs.28,119 crore through a mix of equity, bank lines, bonds and loan sell-downs.

With gross NPAs at 1.75% and net NPAs below 1%, the solvency situation of Indiabulls Housing Finance is relatively solid.

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