 "Girish Kousgi, PNB Housing Finance")
PNB Housing Finance is setting sights on a retail book of ₹1 trillion by the end of next financial year (FY27).
It also plans to grow its affordable housing portfolio ‘Roshni’ to ₹9,500 crore by the end of this financial year (FY26) from the current ₹5,070 crore.
In FY26, the housing finance company plans to open 50 new branches, focusing mainly on the Northeast, Girish Kousgi, managing director (MD) and chief executive officer (CEO), told Business Standard.
Roshni, which is an affordable housing scheme, will be worth ₹15,000 crore by FY27. Meanwhile, the emerging segment would be ₹25,000 crore and the prime portfolio ₹60,000 crore.
By maintaining a run rate of 18.2 per cent against guidance of 17 per cent, the company plans to achieve ₹1 trillion worth of a retail book by FY27.
Roshni promotes affordable housing, especially among first-time buyers.
Kousgi said demand for affordable housing is quite robust in Tier-I and -II cities. However, the only drawback is that some companies would focus on a certain category of cities.
For instance, some would focus on Tier-III and -IV while others plan to target the outskirts of Tier-I and -II cities.
In certain markets in top cities, there has been a slight de-growth, especially in the luxury and super luxury segments. Otherwise, demand by and large is good across all segments, he added.
Due to a few state laws and intervention by state governments, some projects have been stalled.
“In Hyderabad, because of the Hydra project, there was a slowdown in the real estate industry. At a couple of other locations, because of the huge inventory pile-up, sales went down,” said Kousgi.
On the rural market, he said it will take another 10 years for the company to focus on the mortgage business. Due to insufficient land records, most companies shy away from entering the rural market.
The housing finance portfolio overall is in a sound position, he added.
Gross non-performing asset (GNPA) as of March was at 1.08 per cent. In three years, the GNPA has come down from 8.13 per cent.
He added that the company will continue to hire as recruitment will go hand in hand with business growth. Currently, the housing finance firm has not entered into any co-lending arrangement. However, Kousgi said whenever the opportunity arises, the company may consider co-lending pacts.
Owing to sound collection, recovery mechanisms and expansion, operating profit of the company has increased year-on-year (Yo-Y).
Due to rising operating expenses, the company has put in place cost optimisation measures.
With the Reserve Bank of India (RBI) cutting the policy rate twice, the home loan rate is coming down. The rate should be in the range of 8-8.75 per cent for the prime and super prime segments.
The super-prime segment represents borrowers with the highest creditworthiness, while prime borrowers are those with a slightly lower but still strong credit profile.
PNB Housing Finance has shifted focus away from the super-prime segment due to low profit margins. It is concentrating on emerging and affordable housing categories now.
