Will perform but not in a race for market share: V K Sharma

Interview with Director and Chief Executive, LIC Housing Finance Company Ltd

LIC Housing Finance Company Limited, one of the largest housing finance companies in India, is eyeing a consistent growth despite a tepid demand for home loans. V K Sharma, director and chief executive of the housing finance major, in an interview with Komal Amit Gera, unfolded the company’s strategy to hold on to its market share despite the stiff competition. Edited excerpts:

The Reserve Bank of India has cut the repo rate by 25 basis points. Are the borrowers of LIC Housing Finance going to benefit from this?
Our assest-liability management committee will review this. On the basis of its recommendation, we would pass on the margin to our customers.

What is the growth target of LICHFL for the year 2012-13?

We expect to grow at the rate of 20 per cent in the current financial year. Our target is to register a total business of Rs 25,000 cr, out of which, Rs 18,000 cr has already been achieved.

What is current market share of your company and how do you plan to garner a higher market share?
We corner close to 10 per cent market share and percieve to sustain it. Our scheme ‘Bhagya Lakshami’, (an exclusive interest rate scheme for women home-loan seekers) could be a game changer. We sold 3,085 schemes from January 3 this year. We are poised to perform better but are not in a race for market share.

Is the increasing cost of borrowing resulting into higher defaults?
The retail NPAs (non-performing assets) did not show any rise. The NPAs on the funds lent to developers and commercial projects have gone slightly higher. The total NPAs of LICHFL stand at Rs 400cr. Our gross NPAs in second quarter were 0.56 per cent. Our target is to keep the NPAs between 0.50 to 0.75 points.

What are your expansion plans?
We are a pan-India player with a network of 193 marketing offices, 16 back offices and seven regional offices. We plan to hire 100 assistants and keep hiring management trainees to consolidate our operations.

There is a tremendous scope for expansion in the hinterlands but the legal mechanism, security of mortgage and government policies are the bottlencks.

The IT based platform would help us tap the new markets.