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LIC Housing Finance has secured board approval to raise INR 1.23 lakh crore in FY26 through bonds, loans, commercial papers, and external borrowings. This move aligns with the booming housing finance sector, where companies like HDFC Ltd (INR 50,000 crore) and Bajaj Housing Finance have also raised funds to meet rising housing loan demand. The company's stock surged 3.49% to INR 521.20, reflecting investor confidence. With India's housing finance market projected to hit INR 81 trillion by 2030, LIC Housing Finance aims to expand operations and strengthen its market position.
LIC Housing Finance has secured approval from its board to raise up to INR 1.23 lakh crore in the upcoming financial year. This decision, announced on Wednesday, will enable the company to access funds through a variety of financial instruments such as loans, bonds, and other borrowing methods. The approved borrowing budget of INR 1,22,500 crore for the financial year 2025-2026 will play a pivotal role in supporting the company's expansion in the rapidly growing housing finance sector. Advertisement
To raise the funds, LIC Housing Finance will employ various channels, including redeemable non-convertible debentures, zero-coupon bonds, subordinate debt, and commercial papers. The company also has the option to refinance through the National Housing Bank (NHB) or raise funds through public and private placements, external commercial borrowings, and foreign currency bonds. This diverse approach will help ensure liquidity while managing the financial needs of the company as it looks to grow its loan book.
LIC Housing Finance's ambitious move comes at a time when the housing finance sector is booming. The company is looking to capitalize on the strong demand for housing loans in India. For example, HDFC Ltd, another major player in the sector, raised INR 50,000 crore in 2023 through a combination of public bond issues and private placements to expand its housing loan portfolio. This growing trend of borrowing to fund housing finance is evident across the sector, with other companies like Bajaj Housing Finance also raising substantial funds through bonds to meet the increasing demand for home loans in India.
This borrowing plan will allow LIC Housing Finance to scale up its operations and stay competitive in the crowded housing finance space. The company's stock recently rose by 3.49%, closing at INR 521.20 on the Bombay Stock Exchange (BSE), reflecting investor confidence in the company's growth strategy. The funds raised will help expand LIC Housing Finance's footprint across India and cater to the rapidly increasing housing demand.
As the housing finance market is set to grow to INR 81 trillion by 2029-30, companies like LIC Housing Finance are positioning themselves for long-term growth by tapping into diverse financial instruments. The competition in the market is increasing, and the ability to raise significant funds is critical for companies looking to meet the demand for housing loans and remain competitive. With its comprehensive funding strategy, LIC Housing Finance aims to strengthen its market position in the ever-expanding Indian housing sector.
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