Indiabulls Housing Finance, the country's second largest housing finance company, on Tuesday expects cost of funds to be up by around 20 bps in the third quarter.

One basis point is a hundredth of a percentage point.

Indiabulls Housing Finance on Monday reported a profit of Rs 1,044.1 crore for the second quarter of the current fiscal, up 21.2 percent over the year ago period. The company's profit after tax (PAT) was Rs 861.3 crore during July-September quarter of 2017-18.

Also Read: Indiabulls Housing Finance aims to close the year with a loan book of Rs 1.5 lakh crore, says MD Gagan Banga

In an interview to CNBC-TV18, Gagan Banga, vice chairman and managing director, said, "We had commercial papers (CPs) worth Rs 15,000 crore in Q2 of FY19 and by the end of the quarter, we should have an outstanding of Rs 10,000-11,000 crore."

“Unlike some of our peers, we have been using CP in the classic method, which is working capital and since we have never assumed rollover of the CP, we have always kept an amount, which is significantly higher to the outstanding CP ready with us as cash,” he said.

“Since the environment for securitisation and external commercial borrowing (ECB) is quite nice, so we will use this time to raise more money through these two routes rather than CPs,” Banga said.

Banga further added, "Our guidance is to be able to compound at north of 20 percent and that’s the guidance that we have held for several years and we reiterated that guidance earlier this month on 7th."

"I will use this opportunity to again reiterate that we are confident that 20 percent compounding we would continue to do through the course of fiscal 2019 and thereon, I expect that this market would only give us an opportunity which will allow us to grow fast starting fiscal 2021," Banga added.

First Published:Oct 16, 2018 12:43 PM IST