GIC Housing Finance is raising ₹200 crore via NCDs to fund housing loans and refinance debt. The company's Gross NPA rose to 4.74% due to asset reclassification.
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GIC Housing Finance Eyes ₹200 Crore NCD Issue Amid Asset Quality Shift
Issue Size: ₹200 crore Profit after tax: ₹7 crore (June-25) vs ₹160 crore (March-25) Gross NPA: 4.74% (June-25) vs 3.03% (March-25) Reader Takeaway: Fundraising via NCDs is standard, but rising NPAs need close monitoring. ## What just happened GIC Housing Finance Ltd. is launching 'NCD Series 12 Tranche 1', a secured, listed, rated, redeemable, taxable Non-Convertible Debenture (NCD) issue to raise ₹200 crore. The NCDs carry a coupon rate of 8.15% per annum for a tenor of 548 days, maturing on January 28, 2028. The issue has a CRISIL AA+/Stable rating. ## Why this matters The funds raised will be used for onward housing finance disbursements and for the purpose of repayment of existing borrowings/debt refinancing. This move indicates the company's ongoing need for liquidity to support its core business operations. However, the company's asset quality has seen a deterioration, with Gross Non-Performing Assets (NPAs) increasing to 4.74% in June 2025 from 3.03% in March 2025. ## The backstory The increase in Gross NPA is attributed by management to the reclassification of approximately ₹169 crore of properties from 'Assets Held for Sale' to 'Loans at amortised cost'. This accounting adjustment also led to increased provisioning requirements during the quarter, impacting profitability, as seen by the drop in Profit After Tax to ₹7 crore in June 2025 from ₹160 crore in March 2025. ## What changes now For investors, the NCD issue offers a fixed income opportunity with a 'CRISIL AA+/Stable' rating. Existing shareholders should monitor the company's strategy for managing its asset quality, particularly in the Loans Against Property (LAP) segment which has shown higher delinquency. The company continues to comply with NHB capital requirements and receives support from its promoters like GIC-Re. ## Risks to watch The primary risk for investors lies in the deteriorating asset quality. While the NCDs are rated, the underlying performance of the company's loan book, especially the LAP segment and the legacy portfolio, needs careful observation. Geographical diversification beyond Maharashtra is also a key factor to track. ## Peer comparison While specific peer data isn't provided in the filing, GIC Housing Finance operates in a competitive housing finance landscape. Companies in this sector often raise debt capital through NCDs and aim to balance growth with prudent asset quality management. The housing finance sector is also closely regulated by the National Housing Bank (NHB). ## Context metrics (time-bound) As of June 30, 2025, Gross NPA stood at 4.74%, up from 3.03% as of March 31, 2025. Total income for the quarter ending June 2025 was ₹265 crore, a significant drop from ₹1,089 crore in the preceding quarter ending March 2025. ## What to track next Investors should keep an eye on the company's future asset quality reports, provisioning levels, and the performance of its loan book, especially in the LAP segment. The success of its geographical diversification strategy will also be crucial.
