Indiabulls Housing Finance has reduced commercial paper borrowing to Rs 500cr, says MD Gagan Banga


has been going through rough times ever since the merger with Lakshmi Vilas Bank was announced, and, with the uncertainty over the merger now over, the company will focus on growth, said Gagan Banga, Vice-Chairman and Managing Director of Indiabulls Housing Finance.

Ever since the merger was announced, Indiabulls Housing Finance faced multiple attacks and they caused a lot of damage to the company, said Banga.

“There has been a lot of uncertainty over the last five-six months. Clearly, there was a divided house between those of us who were hoping that the merger would go through,” he said.

Banga noted that a large number of people including several quarters of the media believed that the merger will not go through.

“This was being viewed by the regulator as more a backdoor entry and if we have to look at a bank, we should be applying straightforward,” he said.

With all the uncertainties are over now, Banga said there is no reason that can stop Indiabulls Housing Finance from growing its assets under management by 20 percent on an annual basis.

“We were able to beautifully run down all of our short-term liability so the company has practically no commercial paper funding today.”

He said Indiabulls Housing has reduced commercial paper (CP) borrowing to Rs 500 crore from a level of Rs 15,000 crore same time last year. The company has also reduced its commercial real estate book by quite a meaningful size, he added.

“Since 2008, we have built the second largest private housing finance company in the country. With the uncertainty getting over, we get back to growth,” said Banga.

“We will have to remain engaged with banks, we are. Ever since this public interest litigation (PIL) got filed, I have personally been discussing things with bankers and I continue to get support from bankers,” he added.

“Over the next two-three months as the air clears up, as these attacks go away, I am quite sure we will get back to growth mode and on an annualised basis there is no reason why we should not be growing our loan assets under management by about 20 percent,” said Banga.

He said Indiabulls Real Estate would be a zero net debt company by the year-end. On March 31, 2018, Indiabulls real estate had a net debt of roughly Rs 10,000 crore.

“The agreements have already been executed and we continue to receive the money in tranches over the course of the next 15-30 days, which makes Indiabulls real estate a zero net debt company,” he said.

“That has been largely been an outcome of our endeavour to convert ourselves to a bank. So while this development did not progress, there is a huge silver lining in Indiabulls real estate going debt free in our commercial real estate book reducing. So fundamentally, the group today is in a better position,” he further mentioned.

“As far as Indiabulls Real Estate is concerned, the promoter is very convinced about the fact that Indiabulls real estate has to be a very moderately leveraged company. For the growth plans of Indiabulls real estate, the promoter is engaged with both Embassy as well as Blackstone and I am sure some new plants and the details of that would emerge over the next few days to weeks. In the meantime, Indiabulls real estate has also called for a board meeting tomorrow to consider a buyback of its shares,” he said.

News Source: Moneycontrol

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