The Hindu Business Line : Dewan Housing lowers growth expectations

Mumbai, July 5 With the Reserve Bank of India tightening its reins and banks raising interest rates, private housing finance players, such as Dewan Housing Finance Corporation, have lowered their expectations for the current fiscal.

Bankers too are apprehensive that interest rate hike could increase the default rate as higher home loan rates push up the equated monthly instalments.

Analysts, on the other hand, say the high interest rates lead to a reduction in the growth rate of the home loan segment. Most banks have raised their lending rates for housing by 50-75 basis points.

Moreover, high property prices and interest rates affect buyer affordability, which in turn could lead to a slowdown in home loan disbursement.

Growth outlook

Dewan Housing has scaled down its growth expectations to 20-25 per cent against 30-35 per cent it had had over the last few years.

“We have informed our stakeholders that the current macro-economic scenario is not conducive for higher growth,” said Mr Kapil Wadhawan, Vice-Chairman and Managing Director.

Dewan Housing, with an asset base of about Rs 4,700 crore and over one lakh accounts, has raised lending rates by 50 basis points across the board this week. Its network spans 175 locations with 59 branches, 83 service centres and several camp offices.

It has set up offices in Dubai and London to service non-resident Indians. The overseas offices have disbursed over Rs 60 crore to about 500 clients.

Bank Tie-up

The housing corporation has tied up with the Punjab and Sind Bank to further its reach in the North. The bank has 890 branches of which 480 are in Punjab, Haryana and Chandigarh.

Dewan Housing has set up a central processing centre at Chandigarh which will initially handle loan requests garnered through 20 branches of the bank, with the branches facilitating enquiries.

The tie-up targets Rs 100-crore business this fiscal. The bank will provide 50 per cent of the advances made, said Mr Wadhawan.

The company is funded by a consortium led by the Union Bank of India.

Dewan Housing intends to raise Rs 2,000 crore debt this year of which 75 per cent will be from the bank-consortium and the rest by way of bonds.

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