MUMBAI, May 14: LIC Housing Finance plans to enter corporate housing finance in its simultaneous bid to strengthen its existing hold over the core areas of retail finance business.

"We intend to diversify our business outlook and spread out our financial liquidity and potential to tap the requirements of the corporate and public sector units," said LIC Housing Finance chief executive officer YP Gupta.

According to Guptay, the company would meet tentatively on May 29 or May 30 for discussing the annual accounts and also for declaring a dividend. The company plans to extend its reach to tap the housing finance requirements of public sector undertakings employees and also through the corporates advance loans for staff quarters.

"Lending finance to the PSU employees would mean bearing a lower degree of risk," said Gupta, adding that, "Corporates are always in need of funds for financing the housing requirements of the employees, this area will reap rich benefits in the future".

LIC Housing Finance has always been at an advantageous position due to the fact that they have received cheaper funds from Life Insurance Corporation. "Unlike the other housing finance companies who have to borrow funds from the market at high interest rates, LIC Housing gets loans at concessional rates of about 14 per cent through Life Insurance," said Amit Rajpal, research analyst at Prime Securities.

"Sound fundamentals of the company accompanied by concrete projections for the future, and given the fact that the stock is quoting at a discount of 9 per cent against the current market price makes it a safe bet for long-term investment," said Rajpal. Moreover, clients of LIC Housing Finance have to take a life insurance policy.

Backed by sound fundamentals and expectation of a net profit of Rs 60 crore in 1996-97, a rise of 15 per cent over the last year's figures of Rs 50.62, the stock price has moved up 18 per cent on institutional buying.

According to market sources, Mutual Funds and FII's have about 20 per cent holding in the company and 25 per cent holding lies with the Public. FII's like ING Barings, Jardine Fleming and F&C already have a minor holding and are keenly picking up the stock from the secondary market.

The LIC Housing Finance stock has moved up from Rs 59.50 recorded on May 2 to a high of Rs 73 on May 14 on the Bombay Stock Exchange The stock's volumes on BSE spurted 400 times.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.