Market been captured in the lower rates of interest,

The Indian home loan higher average loan amounts and a bounty of
market is comprised innovative schemes that have included
of housing finance everything from hire-purchase and re-financing
companies (HFCs) options to mortgage and loans against
overseen by the properties.
National Housing This growth story was aided by tax rebates
Bank and commercial on housing loans, greater professionalism by
banks regulated by builders and a general regard for completing
the Reserve Bank of projects on time.
India. For the billion The collapse of international economies in
plus people in this 2008 had a debilitating effect on the Indian
country, housing is a housing market. Propped as it was by
basic necessity. The speculative buying, this over-heated sector
housing finance suffered acute damage. But by mid-2009 with
market draws its the storm appearing to blow over, the real
strength from the estate market is gradually picking itself up. It is
yawning demand- expected that on the back of declining loan
supply gap estimated rates and a focus on affordable housing, the
at 24 million dwelling markets should gain momentum by the middle
units. A burgeoning of 2010 (Source: government and industry
middle-class with a forecasts).
high percentage Affordable housing is not an imaginative idea
of working age but a practical imperative in today's market.
population, migration With a huge shortfall of dwelling units this is
to cities, rapid the market that will drive the entire housing
urbanisation and the finance industry.
break up of joint LIC Housing Finance Limited (LICHFL), a
families into nuclear giant in the home loan segment, has seen more
families are strong than 100% increase in loan approvals in the first
growth drivers. Tax five months of the fiscal year 2009/10. Its
breaks on interest disbursals have grown by close to 70% as
and principal compared to the corresponding period in
repayment on the previous year (Source: internal data). The
housing loans also average size of the loan, too, has increased to
pump adrenaline into Rs. 13 lacs (US$ 27,000) from Rs. 12 lacs
this industry. With (US$ 25,000) a year ago.
a low mortgage For the full fiscal year, the company forecasts
penetration rate as a minimum 40% rise in loan disbursements
compared to its to Rs. 12,500 crore (US$ 2.60 billion). It also
peers, India offers a expects loan defaults in the year to fall for
growing potential for the first time below 1% from 1.10% in the
housing finance. previous year.
Housing plays a Housing finance annual disbursement for
fundamental role in the financial year 2009/10 is estimated at
any nation's economy. Rs. 130,000 crore (US$ 27.10 billion) against
During the last Rs. 117,000 crore (US$ 24.40 billion) in the
decade, the Indian previous year.
home loan market An idea of how the home finance market has
has been one of the grown can be sketched from the fact that in the
most powerful and five year period between 2003/04 and 2007/08
accurate economic the industry clocked a spectacular compounded
barometers to gauge annual growth rate (CAGR) of over 30%. Sitting
the emergence of an as it is at the junction of a government priority
upwardly mobile of providing affordable housing to all citizens,
middle-class. This LIC Housing Finance is discharging an important
relatively short period function. Not only are the efforts of the
has witnessed a key company helping more people get their own
demographic change: roof over their heads, they are also generating
from the late 40s huge employment opportunities, as well as
of yesteryears catalysing several ancillary industries which
borrowers, today, are contribute seminally to the growth and
in their mid-30s. development of the economy.
This is a reflection
of increased Achievements
purchasing power and LICHFL has been a consistently outstanding
new upward mobility. performer in all areas of operations. A set of
The dynamics of this impressive figures tell the whole story. Over the
environment have last three years, the company registered a

126 SUPERBRANDS
CAGR of 34% in loan
sanctions, 31% in loan
disbursements and 25% in
outstanding loan portfolio.
Profits after tax (PAT)
reflected a three-year CAGR
of 38% whereas income
registered a 35% CAGR.
During the three-year
period between 2007 and
2009, the company's net non-
performing assets (NPAs)
declined from 1.30% to
0.21%, even as the company's
net worth increased from
Rs. 1543 crore (US$ 321.50
million) to Rs. 2234 crore
(US$ 465.40 million). By any
financial or actuarial yardstick,
this has been a command
performance.
LIC Housing has so far
provided financial solutions to
over one million customers.
As of March 2009, the
company had sanctioned
loans worth Rs. 45,624 crore
(US$ 9.50 billion) while
actually disbursing Rs. 42,994
crore (US$ 8.95 billion) since
it commenced operations
two decades ago.
For the year ended 31st
March 2009, the company's
total income from operations
was Rs. 2880 crore (US$ 600
million) as against Rs. 2146
crore (US$ 447.10 million)
during the same period in the
preceding year. Net profit
during this period was
Rs. 531.62 crore (US$ 110.80
million) as compared to
Rs. 387.19 crore (US$ 80.70
million) – registering a growth
of 37%. The outstanding
mortgage portfolio as on
31st March 2009 was
Rs. 27,679 crore (US$ 5.80
billion) as against Rs. 21,936 crore
(US$ 4.60 billion) on 31st March, 2008 –
an increment of 26%.
History
Promoted by the Life Insurance Corporation of
India (LIC), LICHFL was incorporated on 19th
June 1989. The company launched its IPO in
1994 and GDR in 2004. Its shares are currently
listed on the BSE and NSE. The global
depository shares are listed on the Luxembourg
Stock Exchange. With a spread of 158 marketing
offices in the country, the organisation has
one of the largest networks in India. This is
supported by some 9000 feet-on-the-street
agents.
LICHFL Care Homes Ltd, a 100% subsidiary
of LICHFL, launched its first Assisted Living
Community Centre for senior citizens at
Bangalore in 2006. Two years later, the company
started another wholly owned subsidiary,
LICHFL Financial Services Limited. This entity
was created for the distribution of retail financial
products including home loans of LICHFL.
LICHFL Financial Services Limited has already
set up 25 branch offices across the country
and plans to set up several more in the
current fiscal.
Product
LICHFL offers a wide variety of housing loan
schemes. These include loans to individuals –
including non-resident Indians – for new houses,
loans for repairs and renovations, mortgage
loans on existing property, loans for self-owned
pan India players as well as a
host of local players operate
within it. Despite fierce
competition, LICHFL has
been able to maintain a
strong foothold over the
past 20 years.
The company has taken
a calibrated decision to
improve its market visibility. In
2006, it embarked on a
multimedia campaign
covering TV, radio, print,
online, outdoor, as well as
organising events. The popular
LICHFL-sponsored
programme Blockbuster
Budhwar has been running
uninterrupted on FM
Radio Mirchi for the past
three years.
Another avenue for
promoting itself is the tie-ups
LICHFL has with premier
property exhibitions. It has
also increased its distribution
capabilities by augmenting the
number of branch offices. In
the next three years the
organisation plans to double
its distribution capacity
through its in-house channel
and distribution arm, LICHFL
Financial Services Limited.
Brand Values
Transparency, trust and
credibility – these qualities
are synonymous with the
LICHFL brand. For two
decades, transparency in
business practices has been
the core driver of the
company's corporate
philosophy. The organisation
believes in putting the
interests of its customers
above all – a belief that is
accepted and shared by
office premises to professionals and special more than a million satisfied customers.
schemes for employees of reputed corporate
houses. www.lichousing.com
The company also provides loans against
financial assets like national savings certificates, Things you didn’t know about
life insurance policies and fixed deposits. It is
now finalising a reverse mortgage product for LIC Housing Finance
senior citizens. In addition to individual housing
loan schemes, the company also offers loans to LIC Housing Finance has been a profit-making
reputed builders and developers for residential and dividend-paying company since 1990 – its
projects, as well as loans against securitisation of first full year of operation
rental receivables. LICHFL was the first Indian housing finance
company to be listed overseas
Recent Developments
As demand steps up LIC Housing Finance will The concept of a life-insurance linked mortgage
increase its market exposure and reach deeper product was first introduced in the country by
into its pockets. To meet these growing needs, LICHFL
the company raised funds through a qualified LIC Housing Finance was a participant in the
institutional placement (QIP) of 10 million pilot issue of mortgage backed securities
equity shares amounting to Rs. 658 crore launched in August 2000 by the National
(US$ 137.10 million). The company is also Housing Bank
planning to raise debt of Rs. 15,000 crore
(US$ 3.10 billion) through non-convertible As per the Global Financial Brand Index 2007,
debentures, commercial papers and other LIC Housing Finance Limited is one of the top
instruments during the current fiscal. 500 financial companies in the world
To service loans and make them more
accessible to people, LICHFL had planned to In two consecutive years 2007 and 2008, LIC
open 26 new branch offices in 2009/10. Of Housing Finance grew twice as fast as the
these, 22 were thrown open to business in April industry
itself. The company also plans to launch a real As at 16th September 2009, the LIC Housing
estate venture capital fund in the current year. Finance stock is the second-best performer on
the 67-stock Bloomberg Asia Pacific Diverse
Promotion Financial Services Index in the calendar year
The housing loan market is one of the most 2009
competitive in the country. A large number of
SUPERBRANDS 127