IIFL Home Finance Ltd. acquires 5% share in RDCL promoting residential mortgage-backed securitisation in India

IIFL Home Finance Ltd

IIFL Home Finance Ltd. (IIFL HFL), India’s top housing finance provider, announced its critical foundational role in revolutionising the nation’s mortgage industry. IIFL Home Finance, a founding member of the RMBS Development Company Limited (RDCL) consortium, will contribute ₹ 25 crore for a 5 per cent interest, joining other top financial institutions committed to boosting liquidity and growth in the residential mortgage-backed securities (RMBS) market. This project represents a dramatic move towards a bond market-driven approach to house finance, as seen in successful models in industrialised countries.

RDCL brings together prominent businesses such as ICICI Bank, HDFC Bank, Bajaj Finance, Shriram Housing Finance, Aditya Birla Housing Finance, Hero Housing Finance, and Grihum Housing Finance Limited, with National Housing Bank (NHB) (39%) and LIC (10%) holding the largest interest. The collaboration has pledged ₹500 crore to revitalise the RMBS market and leverage its potential to support affordable housing.

IIFL Home Finance Ltd. has an established track record of enabling first-time home buyers, with an emphasis on low-cost housing financing. Over the previous eight years, the company’s Assets Under Management (AUM) has risen at a spectacular 38% CAGR, reaching ₹32,937 crore as of 9MFY24. Notably, the majority of IIFL HFL borrowers are women, demonstrating the company’s commitment to financial inclusion and social responsibility. IIFL Home Finance dominates the sub-₹ 25 lakh loan category among house finance companies.

IIFL HFL’s commitment to social impact goes beyond sustainable housing projects. The company is a key donor to the Credit Linked Subsidy Scheme (CLSS), providing over ₹ 1,750 crores in subsidies to over 75,000 households. This demonstrates the company’s commitment to promoting homeownership among low- and middle-income families. The company has also issued loans to around 25,000 Beneficiary Led Construction families through PMAY.

Monu Ratra, CEO and ED of IIFL Home Finance Ltd, said, “We are thrilled to be a part of this transformative initiative. This is a watershed moment for the Indian mortgage industry. The RMBS platform under the aegis of the National Housing Bank (NHB) shall provide the much-wanted liability diversification and improvement of cost of funds for all mortgage players. IIFL HFL is humbled and proud to be able to play its small role in India’s first ever RMBS platform.”

IIFL Home Finance Ltd., a champion of sustainable housing practices, received over $ 450 million in FY 23-24 from DFIs such as the United States International Development Finance Corporation (DFC), the International Finance Corporation (IFC), and others to support affordable and green housing for low-income and economically disadvantaged groups. This impressive funding not only reinforces IIFL HFL’s position as the leading affordable housing company, but it also aligns with the government’s vision of Housing for All, which promotes financial inclusion, environmental and social responsibility, and will help to close the affordable housing gap in India.

Also Read | Generative AI tools to power the upcoming wave in the fintech ecosystem of housing finance: Rachit Gehani, CTO, IIFL Home Finance

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