According to a recent report by ICRA, among all states and union territories, Maharashtra holds the highest share of the housing loan portfolio of Housing finance companies (HFC)s. Maharashtra holds around 30% of HFCs’ housing loan portfolio followed by Delhi-NCR and Tamil Nadu with 11% share each.
The report was conducted on 28 HFCs across India. “The housing loan portfolios of HFCs remain geographically concentrated with Maharashtra, Delhi/NCR, Tamil Nadu and Karnataka accounting for 61% of the portfolio as on March 31, 2017, driven by the volumes in the mega cities of Mumbai and the metropolitan region, Delhi and surrounding cities of Noida and Gurgaon, Chennai, and Bangalore respectively,” said Supreeta Nijjar, vice president (Financial Sector Ratings), ICRA.
The report further revealed that share of housing loans in the overall HFC portfolio has seen a slight decline in the last three years. “In March 2015 the share of housing loans in the overall HFC portfolio was around 71% which dipped to about 68% in March 2017.” During the same period, the share of non-housing loans in the overall HFCs' portfolio has inched marginally from 29% in March 2015 to 32% in March 2017. ICRA expects that the increase in the share of non-housing loans portfolio could lead to an increase of HFCs’ gross NPAs from 0.8% as on June 2017 but remain within 1.0% and 1.3% for FY2018.
“An increase in the share of riskier sub-segments like non-housing loans, self-employed and affordable housing in the overall portfolio of HFCs could impact asset quality indicators of HFCs. These may get partly mitigated by the strong monitoring and control processes of HFCs, borrowers’ own equity in the properties and the large proportion of the properties being financed for self-occupation especially in the affordable segment,” said Nijjar.
As for the new HFCs operating in the affordable segment, the share of home loans was at 83% as on March 31, 2017. “Home loan penetration in the affordable segment continues to be high in western India, with Maharashtra alone accounting for half the portfolio of all financiers in the ‘affordable’ segment taken together, and the top three states (Gujarat and Rajasthan, apart from Maharashtra) comprising 64% of the total,” added Nijjar.
