LIC Housing Finance , the country's second largest in the segment, has planned to raise Rs 1,150 crore through a Qualified Institutional Placement (QIP) issue.
"We have already finalised the merchant bankers and depending upon market conditions, we should be able to seal the issue in the next one-two months," V K Sharma, chief executive, told reporters.
The issue would boost the capital adequacy ratio (CAR), he added. The company feels demand for housing loans is still robust, as does the sector regulator, the National Housing Bank. NHB expects housing loans to grow 20 per cent this financial year as against 17 per cent growth last year.
"We do not rule out further price wars among banks themselves and the housing finance companies," said NHB chairman R V Verma
The banks have about 68 per cent share in the home loan market and the rest is with housing finance corporations (HFCs), Verma added.
Banks this year are giving a thrust to retail lending as corporate book growth is almost nil. Most public sector banks are offering home loans at the base rate.
NHB says it doesn't plan to increase the CAR for HFCs, currently at 12 per cent.