PNB housing raises $100 million in its first ECB this fiscal year

KOLKATA: PNB Housing Finance has raised $100 million (₹690 crore) from International Finance Corporation (IFC), in its first external commercial borrowing this fiscal.

The fund was raised for providing small- and medium-ticket housing loans, the company said on Monday. Official data suggest that India needs to build 11 million homes in the affordable housing segment as nearly 50 million people do not have adequate housing.

“To support the government’s vision of Housing for All by 2022, our country strategy places a strong emphasis on the affordable housing sector,” said Hemalata Mahalingam, manager (financial institutions group) at IFC South Asia. The investment was made under the central bank’s automatic route.


“This is the first external commercial borrowing (ECB) disbursement during the current financial year. Several other ECB proposals are in the pipeline,” said Sanjaya Gupta, MD, PNB Housing Finance, where promoter Punjab National Bank holds 32.67 per cent. Gupta said that the fully-hedged facility has come at a landed cost that is much lower than the domestic pricing for similar tenures. “The line of credit will not only enhance the liquidity but will further balance our long-term asset liability as the facility is for five years,” he said. CFO Kapish Jain said that borrowing cost from IFC was about 50 bps lower than current local market rate in similar maturities. The IFC borrowing is for five years.

The company’s share price dropped 1.28 per cent on Monday to ₹699.60 on the BSE, while the Sensex fell 0.52 per cent to 37.686.37 points. RBI has allowed PNB Housing to borrow up to $750 million annually in ECB under the automatic route.