Welcome to the forefront of sustainable finance! LIC Housing Finance, the esteemed mortgage arm of insurance giant LIC, is gearing up to revolutionize the housing industry with its pioneering Green Bond Initiative. In the upcoming financial year, the company aims to mobilize funds through green bonds, dedicated to fueling environmentally-sustainable housing projects. This groundbreaking move not only aligns with global efforts towards a greener future but also showcases LIC Housing Finance’s commitment to fostering eco-friendly living spaces.
Before delving deeper into LIC Housing Finance Green Bond Initiative, let’s first grasp the concept of green finance:
Green finance refers to financial products and services that are specifically designed to support environmentally sustainable projects and initiatives. These can include investments, loans, bonds, and other financial instruments that promote activities aimed at mitigating climate change, protecting natural resources, and fostering sustainable development.
LIC Housing Finance’s Managing Director and CEO, Tribhuwan Adhikari, revealed in an interview with PTI, “Green financing is something that we will look at next year, and we would deploy the fund for financing green housing projects.” This statement underscores the company’s commitment to prioritizing environmentally-sustainable initiatives in the housing sector.
LIC Housing Finance is set to convene its board meeting on March 7 to deliberate and sanction the borrowing plan for the fiscal year 2024-2025. The plan encompasses various avenues including loans, redeemable non-convertible debentures, zero couponed bonds, subordinate debt, Tier II bonds, or any other modes approved by the regulatory authority.
Managing Director and CEO, Tribhuwan Adhikari, expressed the company’s optimism in achieving a net profit milestone of Rs 5,000 crore by the end of the current financial year. This optimistic outlook is fueled by robust loan demand and the strategic expansion of non-core business segments. He added that the non-core businesses encompass Loan Against Property (LAP) and affordable housing finance.
“The affordable housing segment has continued to exhibit strength, particularly in tier-2 and tier-3 markets,” he noted. We remain steadfastly focused on this segment, recognizing its potential to empower millions of aspiring Indians to realize their dream of homeownership within a moderate budget.
Furthermore, he emphasized, “Our commitment extends beyond mere business growth. We strive to enhance service standards by continuously advancing our digital transformation efforts across our operational processes.
As the fourth quarter typically signifies the pinnacle of business activity for the company, and gauging from the prevailing trends, he stated, “we anticipate concluding this financial year with commendable results.” Having already accrued a net profit of Rs 3,675 crore across the three quarters, he added, “we are optimistic about reaching the milestone of Rs 5,000 crore by the fiscal year’s end”.
In the fiscal year 2022-23, the leading housing finance company had achieved a net profit of Rs 2,891 crore. For the quarter concluding in December 2023,”he elaborated, “the Net Interest Margin (NIM) stood at 3 percent, marking a notable increase from the 2.41 percent recorded in December 2022.”
The Vision Unveiled
LIC Housing Finance’s decision to venture into green bonds marks a significant shift towards environmentally-conscious financing. With an aim to finance environmentally-sustainable housing projects, the company is aligning its goals with global efforts to combat climate change and promote eco-friendly practices. This forward-thinking initiative not only reflects LIC Housing Finance’s commitment to corporate social responsibility but also underscores the growing importance of sustainability in the financial sector.
Driving Change Through Sustainable Finance
At the heart of LIC Housing Finance’s green bond initiative lies a dedication to driving positive change. By mobilizing funds towards environmentally-sustainable housing projects, the company is not only addressing the pressing need for eco-friendly housing but also fostering inclusive growth and development. From promoting energy-efficient construction practices to supporting green infrastructure initiatives, LIC Housing Finance’s green bonds will play a pivotal role in shaping the future of housing finance.
Empowering Communities, Building Resilience
Beyond the financial aspect, LIC Housing Finance’s green bond initiative holds the promise of empowering communities and building resilience. By investing in environmentally-sustainable housing projects, the company is creating opportunities for people to live in healthier, more resilient homes. This, in turn, can have far-reaching effects, ranging from improving public health outcomes to mitigating the impacts of climate change on vulnerable populations.
In conclusion, LIC Housing Finance’s strategic focus on green financing and sustainable housing initiatives underscores its commitment to both environmental stewardship and financial prudence. With plans to raise funds through green bonds and a dedicated emphasis on non-core businesses like Loan Against Property and affordable housing finance, the company is poised for continued growth and impact in the housing finance sector. As it navigates towards achieving a net profit milestone and enhances service standards through digital transformation, LIC Housing Finance remains steadfast in its pursuit of excellence and inclusive growth. With a strong performance outlook for the current financial year and a track record of success, LIC Housing Finance stands as a beacon of resilience and innovation in the realm of housing finance.
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