Dewan Housing aims for 18-20% growth in loan disbursals this fiscal

Diversified financial services major Dewan Housing Finance Corporation Ltd (DHFL) is eyeing 18-20 per cent growth in housing finance disbursals this fiscal on the back of improved demand arising from the 7th Pay Commission payouts and better-than-expected monsoons, Chairman and Managing Director Kapil Wadhawan said.

In 2015-16, DHFL had disbursed home loans worth ₹25,000 crore, said Wadhawan, who was in the Capital for a roadshow on the company’s first-ever non-convertible debentures (NCD) public issue, which is slated to open on August 3.

DHFL, which was till recently focused on private placement market for debt resources, is now opening itself to access public markets for debt resources.

“From the time we became a AAA company, our reliance on capital markets has risen and bank funding has come down to 50 per cent. We want to bring it (share of bank funding) down to 30 per cent. Going forward, I will have to rely more on capital markets,” Wadhawan told BusinessLine .

He made it clear that DHFL was not setting its sights low by aspiring at 18-20 per cent growth in housing finance disbursals this fiscal.

Encouraged by the strong growth in housing finance in recent years, DHFL is now eyeing assets under management of about ₹1 lakh crore in next 18-24 months.

As of end June, DHFL’s aggregate loan book stood at ₹72,000 crore.

“Housing story is well known to everyone. Mortgage penetration rates in India are very low even when compared to South East Asian countries which had higher (penetration) rates. Aspirationally, it is important to have roof over one’s head than to live in rented accommodation. So any strong growth in housing will only have direct beneficial impact on housing finance companies like us,” Wadhawan said.

Wadhawan said DHFL is still keen on raising funds through ‘masala bonds’ and has not dropped plans for issuing such bonds in the overseas markets in the coming days.

“Masala bond clearly is an option for us to raise money going forward. We are ready with the documentation and waiting for an opportune time,” he said.

Just few months ago, DHFL had even done roadshows abroad for raising resources through ‘masala bonds’ but decided against it in wake of difficult market conditions.

The RBI had, in September 2015, issued guidelines allowing Indian corporates, NBFCs, real estate investment trusts and infrastructure investment trusts to issue masala bonds

DHFL, which had raised external commercial borrowing of $130 million in first quarter this fiscal, does not see the ECB route being available for housing finance companies going forward.

“Masala bonds are therefore a good option for us,” Wadhawan said.

He also sees domestic interest rates moving down over the medium term on the back of strong monsoon.

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