Housing finance stocks gain post RBI policy

HDFC, LIC Housing, Dewan Housing, Gruh Finance, Can Fin Homes and GIC Housing were up 1%-3% on the BSE.

Shares of housing finance companies have moved higher by up to 3% on the bourses after Reserve Bank of India Governor, in its monetary policy statement today said it is proposed to reduce the risk weights applicable to lower value but well collateralised individual housing loans.

At present, the minimum risk weight applicable on individual housing loans is 50%.

“With a view to improving “affordability of low cost housing” for economically weaker sections and low income groups and giving a fillip to “Housing for All”, while being cognisant of prudential concerns, it is proposed to reduce the risk weights applicable to lower value but well collateralised individual housing loans,” the central bank said in its Fourth Bi-monthly Monetary Policy Statement, 2015-16.

Detailed guidelines are being issued separately, it added.

Housing Development Finance Corporation (HDFC), LIC Housing Finance, Dewan Housing Finance Corporation, Gruh Finance, Can Fin Homes and GIC Housing Finance were trading higher between 1%-3% on the Bombay Stock Exchange (BSE). At 11:39 am, the S&P BSE Sensex was down 0.38% at 25,519 points.

Meanwhile, the RBI on Tuesday cut the repurchase, or repo, rate by a higher-than-expected 50 basis points to 6.75%, the lowest the key interest rate has been in four years.