Dewan Housing to set up joint venture with IFC for low cost housing loans

According to a top official of mortgage lender, Dewan Housing Finance Corp Ltd, the company is planning to raise up Rs500 crore via Tier-1 capital.

"Board meet will be held in next couple of days. We are yet to decide by what instruments we will raise the funds," chairman and managing director Kapil Wadhawan told reporters on Tuesday. The company also plans to raise up to Rs4,500-5,000 crore via debt to fund expansion in FY11, Wadhawan said.

"We will raise debt funds through various sources like bank term loans, refinance from National Housing Bank and non-convertible debentures," he said. The mortgage lender will set up a joint venture with IFC, Washington, for low cost housing loans, according to Wadhawan.

Dewan Housing would take a majority stake in the venture, he said. He added that the details of the venture, presently being worked out were expected to be operational in a couple of months.

Dewan Housing was also aiming to achieve a lending target of over Rs50 billion in 2010/11, he said. The company's lending is expected to exceed Rs35 billion in 2009/10, he said.

"All indications are that there is tightening of interest rates, but we are confident of maintaining net interest margins at 3 per cent this year," he added.