IFC plans to invest $60 million in Tata Capital Housing

International Finance Corporation (IFC) is planning to invest around $60 million (around Rs 390 crore in Tata Capital Housing Finance Limited (TCHFL).


The investment will involve an IFC subscription of up to the rupee equivalent of $60 million (or about Rs 390 crore) to a secured non-convertible debenture (NCD) issued by the company in one or more tranches. The tenor will be 5-year bullet, the World Bank's investment arm said in a statement.


Meanwhile, Tata Capital is also considering an affordable housing fund to invest in developers of affordable housing projects, and has invited IFC to play a lead role in the structuring and design of the Fund and to act as an anchor investor.


“IFC will evaluate this opportunity on its own merits but it provides an example of the potential synergies that IFC can benefit from through its collaboration with TCL as it seeks to make a major impact in the housing finance area," said the World Bank's investment arm.


IFC's investment in TCHLF will allow Tata Capital Housing Finance to meet its funding requirements from a diversified source and assist in reducing bank borrowings. TCL is very keen to have IFC as an investor in NCDs as it is an important market signal, the IFC statement added.


IFC said it is encouraging Tata Capital HF to increase its focus on the lower end of the market by making the financing conditional upon delivery to smaller towns and cities and to the affordable housing segment.


Tata Capital Housing Finance Limited (TCHFL), is a wholly-owned subsidiary of Tata Capital Limited and is registered with National Housing Bank (NHB) to carry on housing finance activities.


The Company caters mainly to salaried individuals, self-employed individuals, self-employed professionals, non-individual entities, etc. and has been focusing on business opportunities available within the Tata ecosystem. Apart from Housing Loans and Loans against Property to the retail segment, TCHFL also provides project finance loans to developers.


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