Having raised nearly Rs 34,000 crore from the debt market and the National Housing Bank in the past two months, housing finance companies (HFCs) are comfortably placed to meet their debt obligations despite lower collections, according to a report. The total maturing debt of HFCs for 2020-21 is estimated to be Rs 2.9-3.2 trillion, of which Rs 1.4 trillion is accounted for by debt markets, rating agency ICRA said in the report.
“As HFCs raised approximately Rs 34,000 crore through debt market route and from NHB during April and May 2020, it is likely that most of the HFCs will maintain an adequate liquidity profile for meeting their debt obligations even with lower collection levels (50-80 per cent ) in the portfolio,” ICRA Vice-President (financial sector ratings) Supreeta Nijjar said in the report.
The findings are based on the analysis of the rating agency-rated HFCs accounting for around 90 per cent of the sectoral asset under management. The findings have indicated that HFCs weighted average on balance sheet cash and liquid investments stood at about seven per cent of the AUM as on March 31, and at 12 per cent, including the sanctioned funding lines.
The available liquidity could typically cover about two months of debt repayments of most HFCs, while access to the sanctioned funding lines could enhance the cover to three months, Nijjar said.