LICHFL (LIC Housing Finance Ltd), to raise Rs. 500 crore through preference shares to LIC and qualified institutional placement.
The capital raising is expected to support business growth over 2012-13, while
also beefing up tier-I of the company, which currently stands at 8.6% (as of
3Q 2011-12) to 10-12%.
Capital adequacy requirements currently are relatively less strict for HFCs (12% CAR required with no specific requirement for tier-1
capital) as compared to NBFCs (15% CAR required, 10% minimum tier-1 in case
of IFCs).
At the current market price, the stock is trading at a P/ABV multiple of 1.8x FY2013E
ABV.
Angel Broking remain Neutral on the stock.
Review by Angel Broking
The capital raising is expected to support business growth over 2012-13, while
also beefing up tier-I of the company, which currently stands at 8.6% (as of
3Q 2011-12) to 10-12%.
Capital adequacy requirements currently are relatively less strict for HFCs (12% CAR required with no specific requirement for tier-1
capital) as compared to NBFCs (15% CAR required, 10% minimum tier-1 in case
of IFCs).
At the current market price, the stock is trading at a P/ABV multiple of 1.8x FY2013E
ABV.
Angel Broking remain Neutral on the stock.
Review by Angel Broking
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