World Bank’s investment arm International Finance Corp. is planning to invest 200 million dollars in HDFC through five year non convertible debentures (NCDs) or masala bonds. Masala bonds refer to rupee-denominated bonds issued outside India. Recently, IFC said it also plans to invest up to $40 million in housing finance firm Aavas Financiers Ltd.
“HDFC has additionally committed to allocate up to Rs42 billion ($600 million equivalent) from its own resources for on lending to developers of affordable housing projects in India,” IFC said in a statement.
IFC will continue supporting to HDFC as the company develops its affordable housing business through the IFC investment process. The funds will be used by HDFC for providing debt finance to developers of affordable housing projects in India.
A year ago, IFC said it intended to invest up to $38 million in Aspire Home Finance Corp., Micro Housing Finance Corp. and Aptus Value Housing Finance India Ltd. In April, IFC claimed that it is planning to put resources into Fullerton India Credit Company Ltd and Capital First Ltd through NCDs.
Initially in 1978, IFC invested in HDFC and followed it with successive investments during 1987 and 1992. It has likewise given different rounds of obligation over the past numerous years.
IFC and HDFC Investment Ltd. have cooperated together to develop mortgage markets and have been co-financial specialists in housing finance companies in Egypt, Bangladesh, Sri Lanka, and Maldives. In the past, IFC has also backed mortgage lenders Dewan Housing Finance and PNB Housing Finance.
The Government of India has taken different measures to take care of the expanded demand for affordable housing. In the budget speech for 2017-18, finance minister Arun Jaitley said he planned to accord the infrastructure status to affordable housing. They are planning to provide housing units that are affordable by that section of society whose income is below the median household income. Of late, on account of the government’s plan, affordable housing has gotten a great deal of consideration.
May 12, 2017