No slowdown in affordable housing space: PNB Housing Finance MD & CEO

Girish Kousgi, managing director and chief executive officer of PNB Housing Finance, in an interview with Nikesh Singh in New Delhi, says the recent merger of HDFC with HDFC Bank will help the debt market open up, and the borrowing rates might slightly ease off for the sector. Edited excerpts:

How do you see the company’s growth in the affordable housing sector in FY24?

In the short, medium, and long term, the demand is quite robust in the affordable housing segment, which is big and accounts for 32-35 per cent of the share in the mortgage industry. We are not seeing any slowdown in the affordable space.

In the last interview, you mentioned that the company took a conscious call not to grow the corporate side of the book. Will there be any push on that in the upcoming quarters?

The company is not in a hurry to push on the corporate side of the loan book. The company will restart its exposure on the corporate side in the next few quarters.

How do you see the impact of the recent merger of HDFC with HDFC Bank on the housing finance sector?

On the assets side, I do not see any impact because the market is so big as there are multiple financial players and the sector is showing robust demand. On the liability side, it may help HFCs and NBFCs. Because of the merger, the debt market would open up and the rates might slightly ease off, especially on the non-convertible debentures and commercial paper side.

The retail side loan book grew 11 per cent and stood at ~56,978 crore in Q1FY24, whereas the guidance for FY24 was growth of 17-18 per cent. How confident are you of achieving the target at the end of FY24?  

The company is confident in achieving the target of 17-18 per cent. The first quarter is seasonal and, generally, growth is muted during this period. The trend has been prevalent for many years in HFCs and NBFCs. The growth will pick up from the second quarter of FY24. The growth in disbursements is expected to be 22 per cent for FY24.

The company saw a 70 per cent jump in net interest income. How confident are you in this aspect in the upcoming quarters?

The margins as well as overall financial performance will be healthy for the company. In the last 4-5 quarters, rates were increasing and now it will consolidate. Typically, when the rates go up and when they consolidate, HFCs and NBFCs will do well. Only when the rates go down, there needs to be little adjustment.

How is your company prepared with respect to the RBI's discussions on the likely inclusion of HFCs under the integrated ombudsman scheme?  

The company has a strong mechanism for customer grievance redressal. Whenever the regulation is made applicable to HFCs, the company can immediately adapt and follow that guideline.