According to a report by CareEdge Ratings, India’s housing finance market could more than double in its value from 33 lakh crore to 81 lakh crore in the next five years.
This growth will be driven by robust structural elements and favourable government incentives, making housing finance an attractive asset class for lenders. The residential properties market remains a key driver of the housing finance industry, having seen absolute growth of 74 percent in the past 5 years.
As of March 31, 2024, banks dominated the housing loan market with a 74.5 percent share, benefiting from lower funding costs, wider reach, portfolio buyouts, and co-lending arrangements. Meanwhile, HFCs maintained a stable market share of 19 percent, a trend that CareEdge Ratings expects to continue.
In FY24, Housing Finance Companies’ loan portfolio grew by 13.2 percent to Rs 9.6 lakh crore, in line with CareEdge Rating’s estimated growth of 12-14 percent. The agency expects year-on-year growth of 12.7 percent in FY25 and 13.5 percent in FY26, supported by strong equity inflows and capital reserves.
PNB Housing Finance Ltd
PNB Housing Finance, a subsidiary of Punjab National Bank, offers housing and non-housing loans to retail customers. This includes individual home loans, non-resident property loans and loans against property among others. Currently, the company has around 305 branches.
In the latest quarter, the disbursements in the retail sector grew over 30 percent YoY, reaching Rs 5,380 crores. Out of this, affordable housing loans, which stood at Rs 920 crores with a growth of 127 percent YoY. The company is shifting its focus towards retail loans, particularly in affordable housing, while corporate lending continues to decline.
With a market capitalization of Rs 22,367.85 crores, the shares closed at Rs 860.55 on Friday, marking a 4 percent increase from the previous close.
Housing & Urban Development Corporation Ltd
The Housing and Urban Development Corporation (HUDCO), is an Indian PSU engaged in the fields of housing finance and infrastructure project finance. The company was recently granted the prestigious ‘Navratna’ Status by the government in April 2024.
Notably, the company has seen the highest ever disbursements of Rs 31,760 crore during 9M FY25. About 4 percent or Rs 1,332 crore from the overall loans disbursed in 9M FY25 are from the affordable housing segment while the urban infrastructure segment makes up about 96 percent or Rs 30,428 crore.
With a market capitalization of Rs 40,628.56 crores, the shares closed at Rs 202.95 on Friday, marking a 2 percent increase from the previous close.
LIC Housing Finance Ltd
Headquartered in Mumbai, LIC Housing Finance Limited, is India’s largest housing finance company. As a deposit-taking institution, it primarily offers long-term financing for individuals looking to purchase or construct residential houses or flats. The company is backed by Life Insurance Corporation of India.
LIC Housing’s loan disbursements saw modest growth of 2 percent, reaching Rs 15,475 crore in the latest quarter. The competition between home financiers and banks remains intense, particularly in the premium segment. In recent quarters, the company’s disbursement growth has lagged behind its peers.
With a market capitalization of Rs 31,436.10 crores, the shares closed at Rs 571.50 on Friday, marking a 3 percent increase from the previous close.
Bajaj Housing Finance Ltd
Bajaj Housing Finance is engaged in providing loans against property for business or personal needs as well as working capital for business expansion purposes. The company also offers finance to developers engaged in the construction of residential and commercial properties as well as lease rental discounting to developers and high-net-worth individuals.
In the latest quarter, Assets Under Management grew by 26 percent to Rs 1,08,314 crore from Rs 85,929 crore in the previous year. About 56 percent of this amount comes from home loans. The loan disbursement growth rate stood at 17 percent, from Rs 10,727 crore to Rs 12,571 crore.
With a market capitalization of Rs 1,02,852.61 crores, the shares closed at Rs 123.50 on Friday, marking a 2 percent increase from the previous close.
Written by Shwetha Sairam
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