Tata Capital may enter home finance business: report

Tata Group financial services arm Tata Capital, which is raising Rs500 crore through a debenture issue, is planning to enter home finance business by the coming financial year (2009-10).

The company is reported to have applied to the National Housing Bank (NHB) for approval to launch the home loan business.

Tata Capital, a wholly-owned subsidiary of Tata Sons, has entered the capital market with a Rs500 crore bond issue. The company proposes to use the proceeds of the issue for its various financing activities, including lending and investing, repaying existing loans and business operations among others.
 
The NCD issue, which has an option to retain over-subscription of up to Rs1,000 crore, will close on 24 February or earlier as may be decided by the board of Tata Capital, subject to necessary approvals.

Tata Capital would offer 12 per cent interest for the annual and cumulative interest payment options and 11.25 per cent for those opting for quarterly interest payment, which will have an annual yield of 11.73 per cent.

The tenure of all the NCDs would be of five years with varied put and call options and for each category of investors, over subscription allotment would be on a first-come-first-served basis.

Tata Capital had, in August last year, announced plans to enter the home loan business.

Recently, Anil Ambani Group firm Reliance Capital had received NHB approval for setting up a housing finance subsidiary.

Tata Capital currently caters to retail, corporate and institutional clients via seven broad areas of business, namely - Retail Finance, Corporate Finance, Investment Services, Investment Banking, Private Equity, Wealth Management and Rural Finance.