LIC Housing Finance to raise funds through green bonds in FY25

Green Bonds to be raised in FY 25

LIC Housing Finance is raising funds through green bonds in the upcoming financial year.

LIC Housing Finance Ltd (LICHFL), a prominent mortgage arm of the insurance giant LIC, is charting a sustainable course for the future by planning to raise funds through green bonds in the upcoming financial year. This strategic move aims to support environmentally sustainable housing projects and reflects the company’s commitment to fostering a greener future.

Embracing Green Financing thru green bonds

In a recent statement, Tribhuwan Adhikari, the Managing Director and Chief Executive of LIC Housing Finance, expressed the company’s intention to explore green financing options in the next fiscal year. The funds raised through green bonds will be channeled toward financing green housing projects, underscoring LICHFL’s dedication to environmental responsibility and sustainable development.

Board Meeting and Borrowing Plan

LIC Housing Finance is set to convene a board meeting on March 7 to deliberate and approve the borrowing plan for the financial year 2024-2025. The borrowing avenues under consideration include:

  • Loans.
  • Redeemable non-convertible debentures.
  • Zero coupon bonds.
  • Subordinate debt.
  • Tier II bonds.
  • Any other means sanctioned by the regulatory authorities.
Profit Target and Business Expansion

Amid its green financing initiatives, LICHFL remains steadfast in its financial targets. The company aims to achieve a net profit milestone of ₹5,000 crore by the end of the current financial year, buoyed by robust loan demand and strategic expansion in non-core business segments. Adhikari highlighted the significance of non-core businesses such as loan against property (LAP) and affordable housing finance in driving profitability and fostering financial inclusivity.

Focus on Affordable Housing

Affordable housing remains a cornerstone of LIC Housing Finance’s growth strategy. Adhikari emphasized the company’s unwavering focus on the affordable housing segment, particularly in tier-2 and tier-3 markets. By catering to the housing needs of millions of aspiring Indians with modest budgets, LICHFL seeks to democratize homeownership and elevate living standards across communities.

Digital Transformation and Future Outlook

LIC Housing Finance continues to undergo digital transformation initiatives to enhance operational efficiency and customer experience in line with its commitment to innovation and service excellence. Adhikari underscored the company’s proactive approach towards digitalization, aiming to elevate service standards and streamline processes.

Financial Performance and Growth Prospects

Despite encountering challenges such as internal restructuring and management changes, LICHFL remains optimistic about its financial performance. The company reported a net profit of ₹2,891 crore in the financial year 2022-23 and recorded a healthy net interest margin (NIM) of 3% in the third quarter of the current fiscal year. Looking ahead, LICHFL is poised to accelerate the share of affordable housing loans in its loan book and aims for substantial growth in the coming years.

As LIC Housing Finance paves the way for sustainable financing through green bonds, it reaffirms its commitment to environmental stewardship and inclusive growth, setting a precedent for responsible corporate citizenship in the financial sector.

CLICK HERE for more inspiring climate news
Scroll to Top