Poll-bound Bihar tops home loan growth list at 16.3%: Equirus Securities

Poll-bound Bihar has topped the list of growth in outstanding home loans as of June 2025 (June quarter) at Rs 580 crore, up 16.3 per cent year-on-year (y-o-y), suggests a recent study by Equirus. 

 

The top-5 states – Maharashtra, Karnataka, Tamil Nadu, Telangana, and Gujarat – account for ~57 per cent of outstanding home loans, Equirus said, with growth at around 12.5 per cent y-o-y, in line with the pan-India average. 

 

“Growth was stronger in Karnataka, Telangana, Uttar Pradesh, Andhra Pradesh, Rajasthan, Madhya Pradesh, Haryana, and Bihar, with Bihar reporting the highest at nearly 16.3 per cent y-o-y,” the note said. 

 

As of June 2025, home loans, according to the Equirus note, grew 12.8 per cent y-o-y to Rs 41.2 trillion, led by state-owned banks (+15.5 per cent y-o-y) and NBFCs / state finance banks (25 per cent y-o-y). 

 

“Large private banks slowed to +6.5 per cent y-o-y, weighed down by HDFC Bank’s post-merger drag and scale-backs at ICICI Bank and Axis Bank amid spread compression. As a result, state-owned banks now hold 40 per cent of outstanding home loans versus 28 per cent for large private banks,” wrote Rohan Mandora and Apurv Parikh of Equirus Securities in a coauthored note.

 

Ticket size

 

At the industry level, around 56 per cent of outstanding home loans are in the Rs 10 lakh – Rs 50 lakh segment, the note said, but growth here has been modest at 8 per cent y-o-y. In contrast, loans above Rs 75 lakh grew 27 per cent y-o-y, contributing nearly 42 per cent of incremental home loan growth between June 2024 and June 2025.  

 

 

"The share of this segment in outstanding home loans rose to 23 per cent (versus 20 per cent in June 2024). Within this, state-owned banks grew a sharp 47 per cent y-o-y, outpacing large private banks (+14 per cent) and large housing finance companies (HFCs) at around 26 per cent. By volume, loans above Rs 5 lakh account for less than 10 per cent of outstanding active home loans, but their share of incremental loan volumes has averaged ~30 per cent over the past seven quarters, Equirus said.

 

Small finance banks' contribution 

 

SFBs contribute Rs 34,600 crore to the outstanding home loan portfolio, but have been growing at a healthy pace of around 25 per cent y-o-y, the study finds. 

 

"Top five states comprise 61 per cent of the outstanding SFB home loan portfolio. These are largely the western states of Maharashtra, Gujarat, Rajasthan and MP as well as Tamil Nadu from South. Uttar Pradesh (+44 per cent y-o-y), West Bengal (+40 per cent y-o-y) and Telangana (+44 per cent y-o-y) are the fastest growth states for SFB," Equirus said.