LIC Housing To Raise Rs 400cr Via Pref Issue

Bangalore: LIC Housing Finance Ltd proposes to mop up Rs 400 crore of equity funds via a private placement this fiscal in January. The proposal involves issue of 1.2 crore equity shares on a preferential basis. The company expected to obtain about 10 per cent premium to the six-month average price of the scrip. Initially, LIC Housing Finance had proposed tapping the qualified institutional placement route. Once the placement is completed, the capital to risk weighted asset ratio will increase to 21 per cent from the current level of 17 per cent. Insurance behemoth Life Insurance Corporation of India currently holds 40.5 per cent stake in LIC Housing Finance''s paid-up equity of Rs 85 crore. LIC Housing Finance''s bond placements during the last few months were all priced upwards of 9 per cent. As a result, the average cost of working funds was in the region of about 8.65 per cent.