PNB Housing plans to raise up to $125 mn in Q3: MD & CEO Girish Kousgi

In FY25, Kousgi expects the share of borrowing via ECB, NHB, NCDs, and CPs to slightly increase, while bank borrowings will come down

Mortgage lender PNB Housing Finance is planning to raise up to $125 million through External Commercial Borrowing (ECB) in the third quarter of FY25, Managing Director and Chief Executive Officer (CEO) Girish Kousgi said.

“We have an ECB loan sanction of $125 million, which is partially availed of, and we are planning for one more between $100 million and $125 million,” Kousgi told Business Standard, adding that it should be in the early next quarter.

Of its total borrowing of Rs 55,734 crore, term loans account for 39.4 per cent, followed by deposits (32.5 per cent), non-convertible debentures (9.3 per cent), NHB Refinance (9.1 per cent), commercial papers (7.1 per cent), and ECBs (2.6 per cent).

The CEO expects the share of ECBs to increase while bank borrowings decrease. There will be a switch from bank loans to ECBs as lending rates to NBFCs and HFCs have increased, he said.

The company is targeting a retail loan book of Rs 1 trillion by FY27, with Rs 15,000 crore in the affordable segment, Rs 25,000 crore in the emerging space, and Rs 60,000 crore in the prime category. The corporate segment is estimated to reach Rs 8,000 crore by FY27.

Currently, the company’s retail loan book stands at Rs 65,000 crore, with a target growth of 17 per cent in FY25.

The mortgage lender, which had exited the corporate loan segment, plans to re-enter with a current loan book of Rs 1,800 crore.

Kousgi said the company plans to expand its affordable loan book, which accounts for nearly Rs 2,300 crore, to Rs 5,000 crore by the end of FY25.

“We were completely focused on the super prime and prime category. We changed strategy two years back and exited the super prime space. We started the affordable segment and emerging markets. Today, the book is about Rs 2,500 crore in the affordable segment,” Kousgi said, adding that the company would gradually reduce the prime segment and focus on the affordable and emerging segment.

 “We will restart the corporate loan book in the next few months, but it will always continue to remain a small part of the business,” he said.

Of its 303 branches, 160 cater to the affordable segment, 50 in the emerging segments and 93 focus on the prime segment. It plans to add 50 branches every year.

Recently, the company said its board would meet on September 9 to consider and approve issuance of NCDs up to Rs 2,500 crore on a private placement basis, in tranches over the next 6 months.

At the end of June 2024, Punjab National Bank held a 28.13 per cent stake in PNB Housing Finance, while Quality Investment Holdings held 32.68 per cent.