Dewan Housing Finance, 37.32% owned by Wadhawan Global Capital, will look to raise its a major chunk of its required ₹ 50,000 crore this fiscal year from banks, external commercial borrowings and capital markets as urbanisation, an increase in workforce, nuclear families and affordability drives demand, Santosh Nair, president and chief business officer of the company, said.
Wadhawan Global Capital owns 37.32% share in the company.
In April, Dewan Housing raised ₹1,000 crore through masala bonds. And, in June, it raised ₹ 11,000 crore through non-convertible debentures. “There will not be an another NCD issue in the near future. We are looking at various other options such as ECBs, domestic and foreign banks, and public deposits,” said Mr. Nair.
“There is also high cash on our balance sheets. We are very confident of raising ₹ 50,000 crore by the end of this year. There are enough places to borrow and there are multiple sources. We want to have enough of liquidity with us. As of now, we are quite capitalised,” he added.
The current investment in housing is estimated at ₹ 7 trillion and India requires ₹ 120 trillion to meet its housing shortage needs, according the company. It is targeting two categories of households - one with an income of between ₹ 20,000 and ₹ 40,000 per month and another with ₹ 10,000 to ₹ 20,000.
Housing finance companies are growing at a CAGR of up to 18%, according to CRISL Retail Finance (Housing) report. Housing finance companies are expected to witness rapid growth driven by increasing financial penetration and steady property prices.
Dewan Housing was focusing on Tier-1 and Tier-2 cities for growth, Mr. Nair said. The Pradhan Mantri Awas Yojana, which aims to construct more than 20 million houses in India by 2022, has given the company a fillip with National Housing Board acting as the nodal agency for financing companies to avail subsidies.
“We have already got ₹ 130 crore of subsidy and another ₹ 300 crore which should come any time now as it is already lying with the NHB. We have another ₹ 800 crore lying in various buckets. The customer benefits as his monthly instalments are reduced with the subsidy,” he added.
Assets under management increased 33% to ₹ 111,086 crore in the last fiscal year ended March 31, 2018. Net profit grew 26% to ₹ 1,172 crore while gross non-performing assets were at 0.96%. Net interest margin was at 3.04%.
“Majority of our loans fall in the affordable housing space. This year we will grow by about 22%. The company has set up two central processing units in Mumbai and Hyderabad to reduce time for clearing loan applications,” Mr. Nair said. “This enables us to manage risk and increase efficiency of our employees,” he added.