LIC Housing Finance Share Price Gains After Borrowing Approval
Shares of LIC Housing Finance Ltd surged on Thursday, March 7, 2025, following the approval of a significant borrowing budget by its Board of Directors. The state-run mortgage lender announced plans to raise over ₹1.22 lakh crore in FY26, boosting investor confidence.
Stock Performance on NSE
- Intraday high: ₹532.25 per share (+2.24%)
- At 9:27 AM: ₹529.85 per share (+1.79%)
This uptick reflects investor optimism regarding the company’s funding plans and long-term growth strategy.
Details of the ₹1.22 Lakh Crore Borrowing Budget
What the Exchange Filing Revealed
Company in a regulatory filing, disclosed that its Board has approved a borrowing budget of ₹1,22,500 crore for FY26. The company aims to raise funds through multiple channels, including:
- Loans from financial institutions
- Issue of Redeemable Non-Convertible Debentures (NCDs)
- Zero-Coupon Bonds
- Subordinate Debt / Upper Tier II Bonds
- Commercial Paper
- External Commercial Borrowing (ECB)
- Foreign Currency Bonds
- Securitization (Private Placement/Public Issue)
- Refinance from National Housing Bank (NHB)
- Deposits from the Public, Corporates, and Trusts
The funding strategy ensures diversification and liquidity availability, helping LIC Finance maintain a competitive edge in the housing finance sector.
Appointment of Joint Statutory Auditors
The company also announced the appointment of M/s Shah Gupta & Co and M/s Batliboi & Purohit as Joint Statutory Auditors. Their tenure will extend from the upcoming 36th AGM until the 39th AGM in 2028.
This move enhances financial transparency and regulatory compliance, reinforcing investor trust.
LIC Housing Finance’s Financial Performance in Q3 FY25
Company reported solid earnings growth in the third quarter (Q3 FY25), demonstrating its resilience despite challenges.
Key Financial Metrics
- Net Profit (PAT): ₹1,432 crore (+23.1% YoY)
- Net Interest Income (NII): ₹1,997.1 crore (-4.8% YoY)
- Net Interest Margin (NIM): 2.7% (vs. 2.71% in Q3 FY24)
- Loan Disbursements: ₹15,475 crore (+2% YoY)
The decline in net interest income and margins suggests increasing competition in the housing finance sector, particularly from banks offering attractive home loan rates.
Asset Quality Improvement
LIC Housing Finance sold a stressed loan asset worth ₹250 crore, which helped improve its overall asset quality. This step reflects the company’s proactive risk management approach.
Factors Driving LIC Housing Finance’s Growth
1. Strong Demand for Housing Loans
With India’s urbanization and real estate expansion, demand for home loans is rising. LIC Housing Finance benefits from:
✔ Government-backed affordable housing schemes
✔ Rising middle-class home ownership trends
✔ Increased real estate investments
2. Diversified Borrowing Strategy
By raising funds through multiple instruments, LIC Housing Finance ensures sufficient liquidity to meet loan demands.
3. Market Position & Government Backing
As a subsidiary of Life Insurance Corporation (LIC) of India, LIC Housing Finance enjoys strong credibility and trust among borrowers.
4. Stable Earnings Growth
Despite a decline in net interest income, LIC Housing Finance’s loan disbursements continue to grow, reflecting strong operational performance.
Challenges Facing LIC Housing Finance
1. Intense Competition from Banks
Housing finance companies like LIC Housing Finance are facing stiff competition from banks, which offer lower home loan rates.
2. Fluctuating Interest Rates
With monetary policy changes, interest rates impact:
⚠ Borrowing costs for LIC Housing Finance
⚠ Loan repayment affordability for customers
3. Rising Non-Performing Assets (NPAs)
Economic fluctuations and higher household debt could lead to loan defaults, affecting asset quality.
4. Regulatory Challenges
Government housing finance policies and RBI regulations may impact operational flexibility.
Future Outlook for LIC Housing Finance
1. Expansion in Affordable Housing
With PMAY (Pradhan Mantri Awas Yojana) initiatives, LIC Housing Finance is expected to benefit from higher loan disbursements in the affordable housing segment.
2. Strengthening Digital Lending
The company is increasingly adopting fintech solutions to enhance:
✔ Loan processing efficiency
✔ Customer experience
✔ Risk assessment accuracy
3. Focus on Corporate & Retail Loans
LIC Housing Finance is likely to diversify its portfolio, expanding into:
✅ Retail home loans
✅ Corporate real estate financing
4. Sustainable Borrowing & Growth
With its ₹1.22 lakh crore borrowing plan, LIC Housing Finance is well-positioned to fund expansion, manage risks, and sustain profitability.
Final Thoughts
The rise in LIC Housing Finance’s share price reflects investor confidence in the company’s funding strategy and earnings potential. The ₹1.22 lakh crore borrowing plan ensures ample liquidity to support loan growth, while strong financial performance strengthens its market position.
Key Takeaways for Investors
✔ LIC Housing Finance stock gained 2.24% intraday on NSE.
✔ Board approved a ₹1.22 lakh crore borrowing budget for FY26.
✔ Q3 FY25 net profit surged 23.1% YoY to ₹1,432 crore.
✔ Loan disbursements grew by 2% to ₹15,475 crore.
✔ Challenges include rising competition & interest rate fluctuations.
With India’s booming housing market, LIC Housing Finance is expected to play a key role in home loan financing, making it a stock to watch in 2025.
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