India’s housing finance sector is on track for exponential growth, with its market size projected to more than double from ₹33 lakh crore to ₹81 lakh crore by 2029, according to a report by CareEdge Ratings. This surge is fueled by strong structural fundamentals and government incentives, making home loans a lucrative avenue for lenders.
Banks Dominate, But HFCs Hold Steady
As of March 31, 2024, banks continued to dominate the housing loan market, holding a 74.5% share. Their lower funding costs, expansive reach, and co-lending models have given them a competitive edge. Housing Finance Companies (HFCs), on the other hand, maintained a stable market presence at 19%, a trend expected to persist in the coming years.
HFCs saw their loan portfolios expand by 13.2% in FY24, reaching ₹9.6 lakh crore. CareEdge Ratings predicts further annual growth of 12.7% in FY25 and 13.5% in FY26, backed by capital reserves and equity inflows.
PNB Housing Finance: Retail Loans Take Center Stage
PNB Housing Finance, a subsidiary of Punjab National Bank, is shifting its focus towards retail home loans, particularly in the affordable housing segment. The latest quarter saw a 30% year-on-year (YoY) growth in retail loan disbursements, totaling ₹5,380 crore.
A major highlight was the 127% YoY increase in affordable housing loans, reaching ₹920 crore. The company is gradually reducing corporate lending in favor of retail loans.
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Market Capitalization: ₹22,367.85 crore
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Share Price (March 22, 2024): ₹860.55 (+4%)
HUDCO: Record-Breaking Disbursements Amid ‘Navratna’ Status
The Housing and Urban Development Corporation Ltd (HUDCO), a government-owned entity, recently secured ‘Navratna’ status in April 2024, reinforcing its position in the sector. The company recorded its highest-ever disbursements of ₹31,760 crore in the first nine months of FY25.
Affordable housing loans formed only 4% of the total, amounting to ₹1,332 crore, while the bulk—96% or ₹30,428 crore—was directed toward urban infrastructure projects.
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Market Capitalization: ₹40,628.56 crore
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Share Price (March 22, 2024): ₹202.95 (+2%)
LIC Housing Finance: Lagging in Disbursement Growth
LIC Housing Finance Ltd, the country’s largest housing finance company by assets, reported a modest 2% YoY increase in loan disbursements, reaching ₹15,475 crore in the latest quarter.
Competition with banks remains fierce, especially in the premium housing segment. While rivals have posted higher growth, LIC Housing’s numbers indicate a relatively slow pace of expansion.
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Market Capitalization: ₹31,436.10 crore
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Share Price (March 22, 2024): ₹571.50 (+3%)
Bajaj Housing Finance: Leading in Asset Growth
Bajaj Housing Finance is making strides in the industry, reporting a 26% increase in Assets Under Management (AUM), which reached ₹1,08,314 crore from ₹85,929 crore in the previous year. Home loans accounted for 56% of its portfolio.
Loan disbursements rose 17% YoY, climbing from ₹10,727 crore to ₹12,571 crore. The company remains a key player in the segment, offering financing solutions for developers and high-net-worth individuals.
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Market Capitalization: ₹1,02,852.61 crore
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Share Price (March 22, 2024): ₹123.50 (+2%)
