New Delhi, Sept. 11 (PTI): K.K. Birla group company Birla Home Finance is planning to go for an initial public offer in three to four years to mop up cheaper resources to fund its expansion.
“We will go for an IPO after achieving critical mass of Rs 1,700 crore and a profitable track record for three consecutive years,” chairman H. S. bawa said.
The decision to tap the market is in the light of cheaper fund requirement in future years with margins of virtually all housing finance companies shrinking in recent times.
Bawa said the company has drawn up a growth plan for next five years, which envisages a loan disbursement target of over Rs 1,700 crore by 2007 compared with Rs 142 crore in 2001-02, for which it would require higher capital.
The 50:50 joint venture between KK Birla group’s Chambal Fertilisers and BHW Holdings AG of Germany intends to hike its equity to Rs 100 crore by March 2003 through additional capital infusion of Rs 25 crore by each of the partners.
Bawa said the company plans to expand its equity base to Rs 200 crore by 2004-05. BHW inked the joint venture agreement in September 2000 for an initial equity investment of Rs 25 crore.
The company also plans to raise rupee loans from ADB and IFC to ensure a 50 per cent growth in business this fiscal.
Bawa said the company plans to raise an additional Rs 50-100 crore through non-convertible debenture issues while planning to issue mortgage-backed securities this fiscal.