E-home and smart city loans have contributed to our faster growth: Gagan Banga, Indiabulls Housing Finance
Indiabulls Housing Finance expects the government’s push to affordable housing to provide a fillip to the Rs 4060 lakh residential segment. In an interview to Shilpy Sinha, CEO Gagan Banga said the company’s loan book is likely to double to Rs 2 lakh crore by 2024. Edited excerpts: Treasury gains saw a dip in the fourth quarter of 201617. Where did the company’s profit growth come from? Profit has come from growth in loan book and marginal expansion in margins. Even though there were fewer treasury gains this quarter, because of very strong disbursement, leading to very strong book growth and net interest income growth, the profit has grown. Over the last year, margins have grown 56 basis points but overall they are in the guided range of 300325 basis points.
Which of the three segments home loan, loan against property and developer loan saw maximum growth? Our home loan book increased to 56% from 52%. Almost twothirds of our incremental lending is happening for home loans. Within that, the two areas which have allowed us to grow faster are ehome loans, which now contribute almost 20% to our incremental business, and the new Smart City loans, which are loans being given out in 100 small cities and are almost 7% of our incremental lending. Overall the book has grown 32%, in which home loans have grown almost 36% and loans against property would be 18%-19%, and corporate loans would also be 18%-19%.
Which cities saw the maximum demand for home loans?Mumbai, Pune, Bengaluru, Chennai and Hyderabad are the top growing markets for fiscal 2017. Towards the end of fiscal 2017 and April, one is seeing that the NCR (national capital region) market is also coming back. I think for 201718 and 201819, my personal expectation is that the NCR market should be a lot stronger than what it has been in the last two years. What impact did demonetisation have on your business? I would continue to believe that demonetisation was a transitory phase, which is over. It hasn’t really altered the course of too many things. So, as far as our portfolio is concerned, I think subsequent to demonetisation, there was a surge in liquidity, which resulted in rates coming down.
What has clearly happened is that, because of PMAY (Pradhan Mantri Awas Yojana), the confidence has materially gone up among buyers and now buyers are seeking out newer properties, especially those which sell in the `4060 lakh range, and that has given us confidence that we should be able to continue to grow our book by roughly 30%, and from `1 lakh crore, where we ended this year, we should be able to get to `2 lakh crore by 2024. You started the practice of rating loan against property portfolio.Do you see any stress there?
No. Our 99% of the portfolio continues to be in the top three ratings.For us, it was not really course correction that we had to do, it was more about getting a third party to validate what we were doing. There is no major course correction in LAP that we have had to make, so we still do the same kind of business broadly that we were doing earlier, of `7080 lakh, with small business owners.