Almost a year after acquiring beleaguered housing finance lender DHFL, Piramal Capital and Housing Finance is betting big on developer financing loans as demand for credit from that segment increases.
While most non-banks have burnt their fingers with such loans in the past, they are focusing on low yielding developer advances to reputed builders as the preferred route to expand the wholesale book.
“We are consolidating our development finance book, but we still like the business; it is materially a sound business,” said Jairam Sridharan, managing director, Piramal Capital and Housing Finance. “The fact that banks have got serious limitations in terms of how to lend to real estate is well known. So, where will the funding come from? We want to be among those providers.”
Piramal Capital and Housing Finance bought over Dewan Housing Finance Corporation (DHFL) in September 2021 for a total consideration of ₹34,250 crore. DHFL had a developer loan portfolio of more than ₹ 50,000 crore. The company has managed to shed the bulk of those loans.
At the end of September 2022, assets under management (AUM) climbed 35% to ₹63,780 crore, as the retail business expanded 12% and the wholesale business shrank 13%.
“We like the real estate sector and we want to be part of it but we will incorporate some of the learnings from the previous cycle and make sure that those are fully incorporated in our new strategy,” Sridharan added.
The non-bank lender is aiming to build a portfolio where retail is 2/3rd of the book and wholesale remains 1/3rd. At the end of this fiscal year, the company has plans to get close to 50% retail assets.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsBit.us is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
