Hospitality, real estate, MSME solar financing to drive growth: TFCI MD

TFCI eyes ₹2,000 crore disbursement in FY26, driven by booming hotel and real estate funding, and plans to enter MSME solar finance and tourism-focused AIF

The Tourism Finance Corporation of India (TFCI) is seeing strong demand for hospitality and real estate funding and plans to expand into new areas, such as micro, small, and medium enterprise (MSME) solar financing for the tourism sector, said Anoop Bali, managing director and chief executive officer of TFCI, in an interview with Harsh Kumar at his office in New Delhi. Bali spoke about key growth sectors, diversification plans, and the outlook for asset quality. Edited excerpts:

 

What kind of major demand are you currently seeing, especially in the hospitality and reconstruction sectors? 

We are supporting the hospitality sector, and the hotel industry is currently thriving. Many new hotels are coming up, so there’s strong demand for financing new and greenfield projects.

 

The total hotel inventory is expected to grow from around 200,000 to 300,000 rooms. The demand for hotel financing is no longer limited to metros — it’s now spreading to emerging cities and smaller destinations. At the same time, existing hotels also need major renovations, which are creating parallel demand for refurbishment funding.

 

We’re also seeing a rise in mixed-use projects — a combination of residential, hotel, and commercial developments — particularly in metros. To tap into this, TFCI has diversified into funding residential and select commercial real estate projects. Most of these are construction and redevelopment projects in Mumbai, especially society redevelopment. We haven’t entered slum redevelopment in a big way yet. 

 

These projects are smaller in size, typically with a three- to three-and-a-half-year cycle, which lines up well with our asset–liability profile. We’re looking to diversify into solar financing for MSMEs through a co-lending model. We’re also working on setting up a tourism-focused alternative investment fund.

 

Can you elaborate on the MSME solar financing plan? Who are your co-lending partners? 

We’ve identified a few co-lending partners and are currently conducting due diligence. The demand is strong — for MSMEs, power cost is one of the biggest expenses. By setting up solar power systems, they can save ₹4–5 per unit, which is a meaningful saving.

 

So far, in our pilot phase, the response has been encouraging. There isn’t much capital flow in this space right now, so the opportunity is huge. We want to be among the first movers.

 

How much disbursement are you targeting in the hospitality segment this year? 

We are confident of disbursing around ₹1,000 crore to the hotel sector in 2025–26. Overall, including real estate and infrastructure, our total disbursement target for the year is between ₹1,800 crore and ₹2,000 crore. 

 

Are you planning any fresh fundraising or acquisitions? 

We’re exploring acquisitions in stockbroking, investment banking, wealth management, and asset reconstruction. Our board has approved due diligence on one such entity that has six to seven subsidiaries.

 

If we go ahead with the acquisition, we may raise capital. The acquisition will be housed under a special-purpose vehicle or affiliate, while TFCI itself will continue focusing on its core lending business.

 

How much of your borrowing is from banks versus bonds? 

About 65 per cent of our borrowings are from banks and institutions, and the remaining 30–35 per cent is through bonds raised earlier. Most of our recent borrowings are from banks, which continue to support the non-banking financial sector well.

 

Has there been any impact on the tourism sector from recent tariff or climate disruptions? 

No, there’s been no tariff impact. Domestic tourism remains strong. While recent natural calamities affected hotels in hill regions, the industry overall is doing well — both in terms of tourist numbers and spending capacity.₹₹