Indiabulls Housing Finance's counsel has argued that the company was not being able to raise any funds due to the public interest litigation (PIL) filed by an NGO seeking a probe into the public lender and demanded relief but it was refused. Gagan Banga, vice chairman and managing director of Indiabulls Housing Finance shared his views on the matter in an interview with
“The basic allegation in the PIL was that there were some five loans which were given to various business groups and extremely importantly over the course of this week, the Ministry of Corporate Affairs (MCA) has filed an affidavit in the court clearly stating that after due inspection, which lasted over a prolonged period of time, they have found nothing wrong or any violations as far as these five loans are concerned.
“When a PIL happens, it tends to affect the sentiment around the company. In my last interview, I had spoken about the fact that the sentiment is affected, PIL has affected but all this will go away. The MCA’s affidavit on the allegations around these five loans has validated what the management has been saying. The entire air of negativity around the company is completely lifted. To be able to get a statement that there are no violations as far as five loans are concerned from the government is a very powerful statement to get and I am extremely proud of how we have gone about conducting our business. The next date of hearing for PIL is February 28, we will continue to put our facts and I am sure over a period of time, even this PIL will go away."
He continued: “As we continue our strategy of degrowing the commercial real estate book and ramping up the disbursements around the retail book, we are pretty much plus-minus 10 percent from here at the bottom of the degrowth that is required in the balance sheet. From hereon, in the range of 10 percent, we will start regrowing through the retail disbursements that we are doing.
“Bankers have been extremely supportive. They are also in the process of engaging with their respective sanctioning authorities for continuing with our retail disbursements. Public sector banks have been extremely supportive of the company and they appreciate what the sector is going through both the non-banking financial companies (NBFCs) sector and the real estate sector. Nobody is trying to cause further stress neither on the company nor on the sector.”
On fund raising and buyback, he said, “At this point in time, the board has approved a resolution which is seeking shareholders’ permission for two things one is to be able to raise up to a billion dollars in a structure of non-convertible debentures (NCDs) with warrants attached to it and the second is to buy up to 4 percent of the company, 2 percent per year for employees via an employee welfare trust structure. Before we do anything around the buyback, we would await the outcome of what the shareholders have to say as far as these resolutions are concerned.“The rate at which we are raising money from banks would be in the handle of between 8 percent and 9 percent depending on the end use of what we are trying to raise money.”