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PNB Housing Finance is poised for substantial expansion, with its managing director & CEO, Girish Kousgi, expressing confidence that the company's current loan book of Rs 60,000 crore is on track to reach one lakh crore in the next 3-4 years.
As of September 30, 2023, the company has witnessed a 12.5% year-on-year growth in its retail segment, and it aspires to achieve a 17% year-on-year growth for the financial year 2023-24.
Emphasizing its focus on the retail segment, PNB Housing Finance has refrained from corporate loans, recently offloading a significant outstanding loan to enhance its overall asset quality. Kousgi revealed plans to re-enter the corporate loan segment in the future, targeting asset quality and construction finance with selective builders and projects. However, he asserted that the corporate loan segment's peak contribution would remain under 10% of the overall loan book.
The company's overall gross non-performing assets (GNPAs) stand at 1.78%, with retail loan segment NPAs at 1.74%. PNB Housing Finance aims to reduce GNPAs to 1.2% within the next 3-4 quarters. The company projects a credit cost of 40 basis points from the next fiscal year.
In November 2023, the company's board approved a proposal to raise Rs 3,500 crore via non-convertible debentures (NCDs) to fuel business growth, with no plans for additional fundraising for the next 3-3.5 years. PNB Housing Finance's financial metrics, including a capital adequacy ratio of 30%, debt-equity ratio of 3.77, and other key indicators, were reported as of September 30, 2023.
The company is strategically focusing on the affordable home loan segment, with its Roshni initiative. Kousgi revealed that in FY24, the affordable home loan segment contributed about 10% of overall retail loans, and the company anticipates this ratio to increase to 20:80 in FY25. PNB Housing Finance envisions that retail loans will constitute approximately 90% of the overall loan book in 4-5 years, with the affordable home loan segment contributing 40% to this share.
Kousgi highlighted the success of the affordable home loan segment, experiencing a 65% quarter-on-quarter growth in the last two quarters. The company plans to add 60 new Roshni branches by March 2024, further expanding its presence in 10 regions for the affordable home loan segment.
As PNB Housing Finance charts its ambitious growth trajectory, Kousgi remains optimistic about the company's ability to achieve robust financial performance in the evolving housing finance industry, which has grown by 13-14% in the last two years and is projected to reach around 12% this year.
This story was earlier published in ET Realty
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