A PROJECT REPORT ON

LIC HOUSING FINANCE LOAN

PREPARED FORLIC HOUSING FINANCE LTD

BIRLA INSTITUTE OF TECHNOLOGY, MESRA RANCHI

SUBMITTED BYshisksha

GUIDED BY-

INTRODUCTION
The purchase or sale of a home or investment property is not only one of the most important
financial events in peoples lives, but also one of the most complex transactions. As a result,
people usually seek the help of real estate agents and brokers when buying or selling real
estate. Real estate agents and brokers have a thorough knowledge of the real estate market in
their community. They know which neighborhoods will best fit clients needs and budgets.
They are familiar with local zoning and tax laws, and know where to obtain financing. Agents
and brokers also act as an intermediary in price negotiations between buyers and sellers. Real
estate agents are usually independent sales workers who provide their services to a licensed
broker on a contract basis. In return, the broker pays the agent a portion of the commission
earned from the agents sale of the property. Property Service Division of LIC Housing
Finance Limited deals with the same business of real estate. The need of entering in this field
was felt by LIC Housing Finance Ltd due to increasing prospects in Real Estate business.
There are many big brands namely ICICI realty, HDFC Realty, Axis Bank Realty etc. A new
line of business by the name Property services Division is being launched across the country
in selected centers. The function of the Property services Division includes all activities
involved in enabling a prospective home buyers elect the property up to taking the possession
of the same. It is thus conceived to be a one-stop-shop for all the advisory services related to
the above. Property services division, which offers investors and builders a single transparent
platform to buy/sell office and commercial spaces and residential apartments/flats. 2 Page
3. Scope of Property Service Division The Real Estate Investment Scope In India - A
Lucrative And Safe Option Realty sector is one of those sectors that have always yielded high
percentage of capital gain for the investors. Whether be it in the case of the developed
countries or developing nations, each and every economy tries to maintain its financial
infrastructure as sound as possible so that they can easily attract more number of investors
and business personnel to involve with their economy. Real estate sector depicts the true
economic development of a particular nation. India, one of the fastest developing nations in
this world since independence; has success fully emerged as one of the lucrative destinations
to reap assured benefits on real estate investment in almost all the states and cities of the
nation. The modern amenities and infrastructural facilities as good connectivity roads, green
environment, better transport; secured power supply are some of the standout features that
have lured the attentions of investors from all across the globe towards India real estate
properties. In India real estate properties can be broadly categorized mainly into two distinct
groups, namely the commercial property and the residential property. The underlying line of

distinction between a commercial property and residential property is noticed while noticing
the use and purpose of that property. Commercial properties are commonly used as office
buildings, malls, retail outlets, etc. and residential property is mainly used for personal use
only. Due to the development of industries in the NCR region, more and more number of
people have started to earn huge amounts of return from their jobs and businesses. Now they
want to invest their earnings in more lucrative as well as 3 Page less riskier investments that
would give them more benefits as compared to the other options. The Indians look at the
business as the more profitable option with greater dividends on investments. This in turn has
led to the increase in the amounts of foreign investments in business in India. And real estate
markets in India are growing continuously at the rate of 30% each year. Turning our looks
towards the state of the residential properties in Gurgaon and the neighboring NCR cities,
with the fast expansion of population in northern India aided by the recent boom in the jobs
sector, the demand for residential property for such a large population has seen a good amount
of surge. The recent surveys that have been conducted India have strongly indicate India has
the second largest population in the world and china has the largest population in the world.
The study also reveals that within the next decade India will cross Chinese population and
will be on the top for having largest population. Commercial as well as real estate sector has
witnessed a real boom in the NCR region in India. Since the liberalization of the Indian
economy, real estate business has seen an upward trend in the last fifteen two decades. The
advent of the multinational companies to India in order to set up a viable industrial base,
especially the IT sector, which has seen a phenomenal growth, the demand for space has risen
up and with that the prices have also been touching sky heights. The major source of the
thrust is mostly due to favorable economic policies, the constant rise in the purchasing power,
new growth of customer friendly banks professionalism in real estate.

BRIEF INTRODUCTION
OF
LIC HFL

LIC Housing Finance Limited

LIC Housing Finance Ltd. is one of the largest Housing Finance Company in India.

It provides Housing Loan for long term Finance with low Home Loan Interest Rates.
You can take a Home Loan either for purchasing a plot or for house extension or for
repair & renovation.

Vision: Complete Financial Solutions to secure your future.

 History of LIC Housing Finance:

Launched in 1989 as per Companies Act, 1956 lic housing finance has grown to be
one of the largest lender in home-finance market .

Promoted by LIC that helped in initial business functions. Finally after being
promoted as a company offering housing finance by lic it went public in 1994.

LIC Housing Finance news state that its authorized capital stands at Rs.150 crores or
Rs.150 million.

Its shares are trade only in dematerialized form at both NSE and BSE.

Its GDRs are traded at Luxembourg Stock Exchange. Presently, according to lic
housing finance news there are over 158 marketing units; along with a wide network
of 6 regional offices and over 13 back-offices.

1989
The Company was incorporated on 19th June as a public limited company. It was
promoted by LIC of India. The Company provide housing loans to individuals,
builders, development authorities, employers organization etc.
- The Company has started various schemes: Griha Prakash a general scheme,
Griha Tara under which it accepts only Bima Sandesh Plan as Life Insurance
Corporation, Griha Shobha for NRIs and Griha Lakshmi for people to have a second
house.

1994
3,00,57,900 No. of equity shares were issued at a premium of Rs50 per share
through public issue on 15th November 1994. The allotment was as follows;
10,82,000 shares to LIC on firm allotment basis and the balance189,75,900 shares to
public (all were taken up).

1996
The Company has decided to carry out fund based and one-fund based activities, viz.,
debt securitization , lease and hire purchase, renting of properties and giving
guarantee to co-operate bodies.

2000
Crisil has assigned a AAA rating to the issue of mortgage backed pass through
certificate backed by mortgages orginated by the company.

2001
The Company has launched its new scheme, Griha Vikas.

2002
LIC Housing Finance Ltd has informed BSE that the Company has forfeited
1,25,300 equity shares due to non payment of allotment/call monies.
-LIC Housing Finance has approved for the take over of Individual Housing loan
portfolio of GLFL Housing Finance.
-Around 25 investors subscribed to the issue of confidentially placed debentures for a
total amount of Rs.392 cr of LIC Housing Finance Ltd.
-LIC Housing Finance Ltd has decreased its interest rates on housing loans by25-50
basis points.
-Financial Institutions have increased their stake from 0.01% to 1.96% and Mutual
Fund companies have increased their stake from 0.35% to 1.06% in LIC Housing
Finance. -LIC Housing Finance Ltd has decreased the floating rate of interest under
individual loan scheme to 9.5% from 11%.
-LIC Housing Finance signed a deed of assignment to take over individual housing
loan portfolio of Citibank N A.
-UTI and IFCI has been removed from the list of promoters of LIC Housing Finance.

2003
LIC Housing Finance has unveiled a new project for elderly people called LIC HFL
Care Homes .
-LIC Housing Finance Ltd has sanctioned 84,126 loans worth Rs.3265.78cr and
disbursed 76,663 loans worth Rs.2941.24cr under its Individual Loan Scheme.
-LICHFL has mobilised Rs.280cr for 15 years at 7% rate of interest through private
placement.
-Lic Housing Finance Ltd has informed that the shares of the company have been
delisted from The Stock Exchange - Ahmedabad w.e.f December 08, 2003.

2004
Merill Lynch Capitat acquires LIC housing stake of 0.39%
-Templeton Asset Management buys 37,52,362 equity shares, representing5.01% of
LIC Housings total paid-up capital of Rs74.9 crore.
-LIC Housing Finance Ltd has informed that the shares of the Company has been
voluntarily delisted from the Delhi Stock Exchange (DSE) w.e.f. January23, 2004.
-LIC Housing Finance shares delisted from Madras Stock Exchange
-Mr D Krishnan appointed as Chief Executive Officer
- LIC Housing Finance Ltds (LICHFL) one-crore global depository receipts (GDR)
issue opened on August 27.
- Lists its maiden global offerings worth .85 million at the Luxembourg Stock
Exchange successfully.
-Introduces new product that starts as a fixed rate loan but contains an option to
convert it to a Floating rate loan at the end of five years, at the then prevailing rate.

2005
Delist from The Calcutta Stock Exchange Association Ltd (CSE) with effect from
December 09, 2004.
-LIC Housing Finance launches loan product that eliminates the requirement of
charge on house financed.
-Goldman Sachs acquires share in LICHFL

2007
LIC Housing Finance to launch FD scheme
-LIC Housing Finance to enter into reverse mortgage product.

2008
LIC Housing Finance Ltd has informed that the Board has appointed thefollowing
persons as Directors on the Board of the Company on May 20, 2008.
-Name of the Director : Shri. D K Mehrotra For the Position of : Managing Director
.- LIC Housing Finance Ltd has informed that the Board of Directors of the Company
has appointed following person as Director on the Board of the Company on July 01,
2008.
- Name of the Director : Shri A S Narayanamoorthy.
- For the position of : Additional Director.
- Change effective from : July 02, 2008.
-LIC Housing Finance launches Reverse Mortgage for senior citizens.

2009

LIC Housing Finance cut interest rates for new loans by 0.5% where forcustomers
opting for floating rate loans between Rs 30 lakh and Rs 75 lakh, thenew rates will be
8.755 against 9.25%.

COMPANY PROFILE

LIC Housing Finance Ltd is one of the largest Housing Finance company in India. The
company is engaged in the business of providing loans for purchase, construction, repairs and
renovation of houses/flats to individuals, corporate

bodies , builders and co-operative

housing societies and has its operations within India. They provide loans for homes,
construction activities , its corporate housing schemes. Around 89% of the loan portfolio
derived from the retail segment and the rest from large corporate clients. The main objective
of the company is providing long term finance to individuals for purchase / construction /
repair and renovation of new / existing flats / houses. The company also provides finance on
existing property for business / personal needs and gives loans to professionals for purchase /
construction of Clinics / Nursing Homes / Diagnostic Centres / Office Space and also for
purchase of equipments . The company through their subsidiaries LICHFL Care Homes
Limited, is engaged in the business of setting up, running and maintaining assisted living
community centre /care homes for senior citizens; LICHFL Financial Services Ltd, is engaged
in the business of marketing various financial products and services, and LICHFL Asset
Management Company Ltd is engaged in business of managing, advising , administering
mutual funds, unit trusts, investment trusts and to act as financial and investment advisors and
render financial advisory services. The company possesses one of the industrys

most

extensive marketing network in India. The company is having their registered and corporate
office at Mumbai. They have 7regional offices, 13 back offices and 190 marketing units
across India. In addition the company has appointed over 1241 direct sales agents (DSAs),
6535 home loan agents (HLAs) and 782 customer relationship associates (CRAs) to extend
their marketing reach. They have set up a representative office in Dubai and 12Kuwait to
cater to the non-resident Indians in the GLCC countries covering Page Bahrain, Dubai,
Kuwait, Qatar and Saudi Arabia. LIC Housing Finance Ltd was incorporated on June 19
1989. The company was promoted by LIC of India and went public in the year 1994. The

company is recognized by National Housing Bank and listed on the National Stock Exchange
(NSE) & Bombay Stock Exchange Limited (BSE) and its shares are traded only in Demat
format. The GDRs are listed on the Luxembourg Stock Exchange. In the period of 2001, the
company launched their new scheme called Griha Vikas. In the year 2002, the company
signed a deed of assignment to take over individual housing loan portfolio of Citibank. In the
year 2003, they unveiled a new project for elderly people called LICHFL Care Homes. The
company launched their maiden GDR issue in the year 2004. Also, they introduced flexi-fixed
scheme offering fixed rate of interest for first five years and variable thereafter. In October
2005, the company started offering of New Griha Laxmi housing loans against the security of
certain approved financial assets like Bank Fixed Deposits, National Savings Certificates and
Life Insurance Policies. In the year 2006, the company introduced new Griha Jestha for
senior citizens for buying unit of LICHFL Care Homes Ltd. In May 2007, the company
launched maiden Fixed Deposit Scheme. In October31, 2007, the company incorporated
LICHFL Financial Services Ltd for undertaking non fund based activities like marketing of
housing loans, insurance products, credit card, mutual fund, personal loan etc. In February
2008, they launched reverse mortage for senior citizens above 60 years of age. In February14,
2008, the company incorporated LICHFL Asset Management Company Private Limited for
undertaking the business of managing, advising, administering venture funds, unit trust,
investment trust in India as well as abroad. In March 5, 2008, the company incorporated
LICHFL Trustee Company Private Limited for undertaking the business of trustees of venture
capital trust, funds - in India and offshore fund. In March 12, 2008, they launched a new
venture capital fund for realty projects. During the year 2009-10, the company was awarded
the Second Best Home Loan Provider award by Outlook Profit. During the year 2010-11, the
13company launched a unique interest rate scheme namely, MINI 5 to cater to housing
finance needs of the priority sector population residing in Tier II and Tier III cities.