/LIC’s housing finance subsidiary sanctions Rs 600 crore to five developers

LIC’s housing finance subsidiary sanctions Rs 600 crore to five developers

MUMBAI: At a time when most banks and non-bank lenders shy away from the real estate sector, the housing finance subsidiary of Life Insurance Corporation of India is going aggressive on developer financing.

In the last few months, LIC Housing Finance has sanctioned more than Rs 600 crore to at least five developers including Shriram Properties, Vatika Group and Radiance Realty, data collated by data intelligence provider Propstack showed. These range from fresh disbursals to refinance deals where the mortgage lender has taken over loans from other lenders.

LIC Housing Finance sanctioned Rs 225 crore to Shriram Properties as construction finance at a floating rate of 13.25%. At least Rs 65 crore of that will be used to take over an existing loan from Yes Bank.

The lender also disbursed about Rs 54 crore to Vatika Group for making part payment of an Indiabulls Housing loan, corporate affairs ministry data showed.

It sanctioned Rs 108 crore to Radiance Realty in September for two projects, at an interest rate of 13%. At least Rs 46 crore will be used to refinance loans disbursed by Kotak Mahindra Prime and Kotak Mahindra Investments. It sanctioned Rs 116 crore to Concast Infrastructure at 12.5% and Rs 100 crore to DN Homes.

A LIC Housing Finance spokesperson said loan sanctions to builders were being done on a case-to-case basis depending upon merits, and that some of them are existing customers to the lender.

“We have been very selective in lending to builders and exercising due diligence on the projects being taken up for funding,” the spokesperson told ET. “Our confidence comes from the overall viability of the project after taking into account the sales velocity, credential of the developer, adequacy of the security, marketability of the project, cash flows and strength of other collaterals.”

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