Indiabulls Housing Finance has raised a sum of Rs. 1, 000 crore by issuing affordable housing bonds, the very first such instance in India. Yes Bank has arranged and subscribed this initial offering. The affordable housing bond will be working under the regulations of the Social Bond Principles of 2017 which were issued by the ICMA. KPMG will be certifying that these bond proceeds are being used concurrent with these principles. The bonds will have tenors of 5 years and the returns will be 8.12% annually as per reports.
There will be BSE and NSE listings for the bond with regard to secondary trading. The AAA rating for these bonds has been given by CRISIL while ICRA has given them the AAA rating as well. Indiabulls Housing is now focusing on the affordable housing category and the average ticket size for home loans currently stands at Rs. 25 lakhs. The bond will be used for taking care of the requirements of the country in terms of housing. The bond proceeds will go into refinancing and financing the needs of the affordable housing sector as stipulated by the Indian Government which encompasses lending for real estate developers under PMAY and also lending for individuals.
India has an estimated gap of 40 million housing units and growing urbanization trends should contribute another 10 million units every year in terms of overall demand. The Government has embarked on its mission of Housing for All by 2022 and the Government is offering subsidies for the mid-range affordable housing sector under the PMAY with interest subsidies going up to 4%.