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ICICI Home Finance on Tuesday said it is no longer interested in a buy-out, but is looking to expand its home loan business for affordable housing, and will also foray into lending for consumer durables.
“With the large-scale fiscal incentives under the ‘Housing for All’ scheme of the government, a new sector is slowly getting formed,” said Anup Bagchi, Executive Director, ICICI Bank, attributing it as the main reason for the bank to put off any sale plans of ICICI Home Finance.
Acquistion move
The decision comes months after a move by IndoStar Capital Finance to acquire majority stake in the home finance arm of ICICI Bank was called off late last year.
Over the years, the company had seen a lot of interest from potential buyers.
Bagchi said ICICI Home Finance will now focus on providing home loans to the “self-assessed income” groups in semi-urban and rural areas. The loans of up to ₹15 lakh may also come at a higher rate of 9.5 per cent to 10 per cent, partly due to the higher interest rates and partly due to the high risk.
“All large housing finance companies are geared towards salaried customers, but there is a big market of the self-assessed income category, such as shopkeepers, who want to take a home loan, or someone who wants to build a house on a plot of land,” he said.
The company plans to increase its current loan book size of ₹10,000 crore to ₹30,000 crore in the next three to four years.
It will also expand to about 1,000 locations in the next 18 months from the existing 400 locations.
To take forward the plans, a new team, led by Anirudh Kamani, who was earlier head of retail and inclusive banking at ICICI Bank, has been put in place.
Bagchi said the financing for consumer durables will start off as a pilot and will expand eventually, focussing largely on urban areas.
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