Sebi Gives MFs More Room to Park in Hous­ing Bonds

The Economic Times - - Companies: Pursuit Of Profit - Our Bureau

Mum­bai: As­set man­agers, which man­age debt funds run­ning in thou­sands of crores will now have more room to in­vest in cor­po­rate bonds, sold by hous­ing fi­nance com­pa­nies (HFCs) as the cap­i­tal mar­ket reg­u­la­tor Sebi has in­creased their ad­di­tional per­mis­si­ble in­vest­ment limit.

The move has two-pronged ben­e­fits: While it aids Prime Min­is­ter Naren­dra Modi’s prom­ise of “Hous­ing for All” by 2022; this should help deepen the mar­ket for such debt se­cu­ri­ties. “In light of the role of HFCs es­pe­cially in af­ford­able hous­ing and to fur­ther the Gov­ern­ment’s goal un­der Prad­han Mantri Aawas Yo­jana (PMAY), it has now been de­cided to in­crease ad­di­tional ex­po­sure lim­its pro­vided for HFCs in fi­nan­cial ser­vices sec­tor from10% to15%, Sebi said.

Now, reg­u­la­tory guide­lines de­bar sec­toral ex­po­sure in debt ori­ented mu­tual fund schemes with a cap of 25% at the sec­tor level. An ad­di­tional ex­po­sure not ex­ceed­ing 10%, over and above the limit is al­lowed in fi­nan­cial ser­vices sec­tor only to HFCs. “The 50% en­hance­ment in in­vest­ment lim­its of MFs for HFCs will en­sure mean­ing­fully in­creased flow of cap­i­tal for HFCs,” said Ga­gan Banga, vice-chair­man, In­di­a­b­ulls Hous­ing Fi­nance. “It will strengthen our abil­ity to grow our home loans port­fo­lio faster while of­fer­ing the best pos­si­ble rates to bor­row­ers.”

With an ex­pected higher de­mand, th­ese bor­row­ers may have to pay in­ter­est rates, less than the usual, and in turn may pass on the ben­e­fit to home loan bor­row­ers.

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