Affordable housing finance companies may grow at 12-15% in FY22: Report
   Date :18-Feb-2021

Affordable housing financ
 
 
Business Bureau :
 
THE long-term growth outlook for affordable housing finance companies remains positive and the segment is likely to see a growth of 12-15 per cent in the next financial year, says a report. As of September 30, 2020, the total portfolio of the new affordable housing finance companies (AHFCs) in the affordable housing space stood at Rs 55,061 crore, registering a moderate year-on-year (Y-o-Y) growth of 9 per cent, Icra Ratings said in a report. According to the agency’s Vice- President and Head (Financial Sector Ratings), Manushree Saggar, the growth numbers of AHFCs could be much lower at 8-10 per cent in the financial year 2021 due to the delay in home purchases by the borrowers owing to the impact of the pandemic on their earnings and savings.
 
“However, the long-term growth outlook for the sector remains positive given the largely underserved market, favourable demographic profile, housing shortage and Government support in the form of tax sops and subsidies. We expect that the growth would pick up to 12-15 per cent in FY2022,” Saggar said. The report said, the asset quality indicators for AHFCs registered a marginal improvement with a reported gross NPA per cent of 3.1 per cent as of September 30, 2020, as against 3.6 per cent as of March 31, 2020.
 
The moderation was supported by the standstill on the bucket movement during March 2020-August 2020 and the adjustment of the EMIs received during the moratorium period against past overdue, it said. Saggar said, the overall reported asset gross NPA per cent could increase to 3.6-3.9 per cent by end of March 2021 from 3.1 per cent as of September 30, 2020, and stay at similar levels in financial year 2022 assuming growth is in line with the expectations. Over the long term, however, the ultimate losses to the lenders could be limited, given the secured nature of the loans through the recovery time could get extended further, the report said.