The housing finance sector will only grow: PNB Housing Finance MD & CEO

New Delhi-based PNB Housing Finance will restart its corporate business after three years, its managing director and chief executive officer, Girish Kousgi, tells Harsh Kumar in an interview. The company, he says, will grow at a pace faster than the industry average. Edited excerpts:

What is the future of the housing finance market in India?
 

The real estate cycle is about 7-8 years. The demand for housing is always increasing, and so is housing shortage. With the government’s focus on housing, the housing finance sector will only grow. Our focus is also going to be on growth and on the profitable segments.
 

What is the plan for PNB Housing Finance’s corporate business?
 

We are planning to restart our corporate loan business this year after a gap of three years. There was a lot of stress on the corporate book, so about three years ago, we took a call to stop doing additional business. We have worked on resolving this and have brought down the NPAs (non-performing assets) to as low as about 3 per cent (in financial year 2024) from about 33 per cent as on March 2022. There were sales through ARCs (asset reconstruction companies), certain accounts were written off, and in some accounts, builders came forward for settlement. So, there were multiple strategies. 
 

Our focus on the corporate side will be in terms of the overall portfolio mix (retail included). At its peak, corporate will be less than 10 per cent. Currently, our corporate book is a little over Rs 2,000 crore. Our main focus will be on the retail business, and within that, mostly in the affordable and prime segments.
 

What is your growth outlook for the company?
 

We are looking to grow our retail book by 17 per cent, and disbursement will be 24 per cent of our book. Between December and March, we have opened 100 branches; so now we are at 300. This year, we plan to open another 50.  If you look at our asset quality, our retail NPA is 1.45 per cent. By the end of the year, we are looking to bring it down to 1.1 per cent.
 

How do you see PNB Housing standing amid rising competition in the housing finance market?
 

See, there is a huge demand in the housing finance business – in all categories: super luxury, luxury, mid-segment, and affordable.  We are present in three of the four segments: affordable, prime, and emerging. We are not there in the super-prime segment. We see demand in all the segments. So, we will be able to grow at a much faster pace. The industry will grow at about 13.5 per cent, and we should grow at about 17 per cent.
 

What is your view on the Reserve Bank of India’s draft guidelines on infrastructure financing?
 

It is a draft. I don’t think it should have any major impact. But in terms of provisioning, it is great. 
 

Scheduled commercial banks are expan-ding their reach in the housing finance market. Does that impact you?
 

Yes, to a certain extent. Typically, banks are present in the prime and super-prime segments. We are not there in super-prime. In prime, there will be some overlap. Otherwise, on the affordable side, not too many banks are that aggressive.  Last year, we grew more than 11 times in the affordable segment.