DHFL eyeing bigger slice of North Indian market

Home loan major DHFL is eyeing 35 per cent growth in assets under management in north India this fiscal, a top company official said.

This will be a significant jump over the loan book growth of about 25 per cent in north India in the last few years, Harshil Mehta, Joint Managing Director & CEO, DHFL told BusinessLine .

In the North, DHFL has 92 branches (that service about 175 locations) with a loan book of ₹10,000 crore.

“We want to further leverage on technology so that we get deeper into the markets of north India. This increased growth is not going to come from the National Capital Region but will be from deeper and interior northern India,” Mehta said.

Retail home loans will be the main product that is expected to boost growth in the region.

Currently, retail home loans account for 67 per cent of DHFL’s overall portfolio. DHFL, which has historically been a western India focussed player, has spread its wings in the recent decades for a pan-India footprint.

“When we map the 92 branches in the North, we see ourselves well spread. We believe we have a fairly good distribution network. We are now pushing as to how we can use the same distribution network to go deeper. For this, we intend to increase the technology intensity of our operations.” he said.

Mehta also said that the company is well on course to achieving its year 2020 vision of ₹2-lakh crore assets under management on a pan-India basis.

For the current fiscal, DHFL is eyeing 30 per cent increase in disbursements. Mehta expressed confidence in sustaining the current net interest margin of 300-305 basis points

“We will continue to explore avenues to diversify the borrowing mix and, thereby, further reduce the cost of funds,” Mehta said.

In the last three quarters, DHFL had brought down its cost of funds by 65-75 basis points, which had helped maintain margins.

Going forward, DHFL wants to enhance the emphasis on raising resources through fixed deposits, eyeing 20 per cent share of its resource mix by the end of this fiscal.

“We are also going to increase focus on securitisation. This is good for us as it releases capital,” he said.

Mehta also did not rule out the possibility of the company once again re-exploring the overseas masala bonds route for raising low-cost funds.

Mehta, however, ruled out any capital raising by DHFL for the next 18 months, stating that the company is well capitalised to fund its growth.

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