HDFC raises Rs 8.7k cr as ‘social loan’ to finance affordable housing segment

Mortgage lender HDFC Ltd said on Friday it had raised $1.1 billion (about Rs 8,700 crore) from a group of investors under the “syndicated social loan facility” to meet the affordable housing segment in the country.

The country’s largest mortgage lender by asset size said it raised the amount through external commercial borrowing (ECB).

“This landmark financing reinforces HDFC’s long-standing mission to be India’s leading housing finance provider. Proceeds from the social loan will go towards financing affordable housing loans,” the company said in a statement.

MUFG Bank Ltd (MUFG) is the lead social lending coordinator for this transaction and one of the principal mandated arrangers and borrowers (MLAB), it said.

CTBC Bank, Mizuho Bank, State Bank of India and Sumitomo Mitsui Banking Corporation are the other MLABs and Joint Social Lending Coordinators.

It is the largest social finance issuance in India, the largest social loan in the world, the first ECB social loan in India and the largest ECB loan agreement from a housing finance company /NBFC in India, HDFC said.

External commercial borrowings are instruments used by domestic entities to raise capital in overseas markets in Indian Rupee or any other permitted foreign currency.

Since its inception in 1977, the largest mortgage lender by asset size in the country has financed 95 lakh housing units and has a gross loan portfolio of Rs 6.7 lakh crore.

“Affordable housing is an essential part of quality infrastructure, as well as an engine of growth for the real estate sector and the economy in general, given its close links with nearly 300 industries. It contributes to the formation capital, employment and income opportunities,” Deepak Parekh, Chairman, HDFC Ltd, said on the borrowing scheme.

He said a boost to affordable housing will play an important role in achieving the government’s ‘housing for all’ goal.

“The aspiration to own a home is inherent in every household. In India, housing will play an important role as a catalyst for growth with increased demand for affordable housing,” Parekh added.

HDFC calls the social loan “landmark finance” that promotes the company’s long-standing mission to be the leading provider of housing finance in India.

The company’s loans have helped more than 314,000 beneficiaries, mostly in affordable housing, under Pradhan Mantri Awas Yojana’s (PMAY) CLSS (Credit Linked Subsidy Schemes), the highest of any financial institution in India, according to HDFC.

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