Thursday, March 28, 2024

IIFL Home Finance Ltd. takes 5% strategic stake in RDCL Promoting development of Residential Mortgage-Backed Securitisation in India

 Mumbai, March 27th, 2024 – IIFL Home Finance Ltd. (IIFL HFL), a leading housing finance company in India, is proud to announce its strategic founding role in transforming the country's mortgage market. As a founding member of the RMBS Development Company Limited (RDCL) consortium, IIFL Home Finance will be contributing ₹ 25 crore for a 5% stake, alongside leading financial institutions committed to driving liquidity and growth in the residential mortgage-backed securities (RMBS) market. This initiative marks a significant shift towards a bond market-driven approach to housing finance, similar to successful models in developed countries.

RDCL brings together major players like ICICI Bank, HDFC Bank, Bajaj Finance, Shriram Housing Finance, Aditya Birla Housing Finance, Hero Housing Finance, and Grihum Housing Finance Limited, with major shareholding from National Housing Bank (NHB) (39%) and LIC (10%). Together, the consortium has pledged a total investment of ₹ 500 crore to revitalize the RMBS market and unlock its potential for financing affordable housing.

IIFL Home Finance Ltd. has a proven track record of empowering first-time home ownership, with a focus on affordable housing finance. Over the past eight years, the company's Assets Under Management (AUM) has grown at a stellar 38 % CAGR, reaching ₹ 32,937 crore as of 9MFY24. Notably, a majority of IIFL HFL's borrowers are women, reflecting the company's commitment to financial inclusion and social responsibility. Currently, IIFL Home Finance is a dominant player in the sub-₹ 25 lakh loan segments, amongst the housing finance companies.

IIFL HFL's commitment to social impact extends beyond sustainable housing initiatives. The company is a leading contributor to the Credit Linked Subsidy Scheme (CLSS) with facilitating subsidy of over ₹ 1,750 crores to over 75,000 household, further demonstrating its dedication to making homeownership a reality for low- and middle-income families. The company has also disbursed loans close to 25,000 Beneficiary Led Construction households under PMAY.

Mr. Monu Ratra, CEO and ED of IIFL Home Finance Ltd, said, "We are thrilled to be a part of this transformative initiative. This is a watershed moment for the Indian mortgage industry. The RMBS platform under the aegis of the National Housing Bank (NHB) shall provide the much-wanted liability diversification and improvement of cost of funds for all mortgage players. IIFL HFL is humbled and proud to be able to play its small role in India’s first ever RMBS platform.”

IIFL Home Finance Ltd., a champion for sustainable housing practices, secured a total funding of over $ 450 million in FY 23-24 from DFIs such as U.S. International Development Finance Corporation (DFC), International Finance Corporation (IFC), and others to support affordable and green housing for low-income and economic weaker sections. This impressive funding not only reinforces IIFL HFL as the leading affordable housing company but also aligns with the government's vision of Housing for All, promoting financial inclusion, environmental and social responsibility, and will be instrumental in addressing the affordable housing gap in India.

About IIFL Home Finance Ltd. (Re-Drafted Boiler Plate)

IIFL Home Finance Ltd., the largest affordable housing finance company which is a subsidiary of IIFL Finance Ltd., with 79.59% shareholding, while Abu Dhabi Investment Authority acquired 20.41% stake in the company in 2022. As of 31st December 2023, the AUM stood at ₹ 32,927 cr of which home loan is 77%. The Return on Assets (ROA) for the period is at 4.4%. IIFL Home Finance Ltd. is dedicated to providing home loans, empowering the EWS/LIG segments to achieve homeownership. Partnering with Abu Dhabi Investment Authority, IIFL Home Finance Ltd. champions eco-friendly building practices, promoting sustainable development. With a state-of-the-art IT infrastructure offers a seamless loan experience, streamlining the process from application to closure. The company's asset-light model, enabled by co-lending arrangements, allows expansion of their reach into deeper markets across India. IIFL Home Finance Ltd. goes beyond financing homes. They contribute to building a sustainable and inclusive future, one affordable home at a time.

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