Housing finance companies could grow at 13 per cent year on year in 2022-23 as against an 11 per cent growth this fiscal, India Ratings and Research said on Friday.

In its outlook for the sector for 2022-23, the agency noted that low interest rates along with stable property prices and the low impact of the pandemic on job losses and wage growth in the salaried segment have led to improved affordability for borrowers.

“This accompanied with the need for a bigger housing space during the pandemic bodes well for financers to drive the overall assets under management (AUM) growth higher, despite high competition from banks,” it said. 

Affordable housing finance companies could witness strong loan growth due to increasing geographic penetration and a possible increase in ticket size and lead to higher loan growth in 2022-23, it added.

Stable rating

India Ratings and Research has maintained a neutral sector outlook and a stable rating outlook for housing finance companies for 2022-23.

Also read
Getty Images/iStockphoto

Data focus: Indications from the term deposit rate increase by banks

NBFCs may see loan growth on 14 per cent in FY 23: India Ratings and Research

US sanctions will isolate Russia from global financial system, says key White House official

The expected moderation in inflation trajectory over the next financial year provides room for monetary policy to remain accommodative, said Shaktikanta Das

Continued support from various policies remains crucial for a sustained recovery: Das

“The industry has navigated the Covid-19 pandemic with moderate disruptions in collection efficiency and a build-up in asset quality, partially also led by the implementation of the circular on NPA classification,” it further said. 

For 2022-23, the agency has said gross stage 3 numbers of HFCs could increase to 3.3 per cent from 2.8 per cent in the third quarter of the fiscal and an estimated 2.9 per cent for the whole of the current fiscal.

This would be largely due to slippages from the restructured book.

“Additionally, two per cent of AUM is supported by lending under Emergency Credit Line Guarantee Scheme which could also see slippages,” it said.

The broad stage 3 number could rise by 70 basis points as it was seen in the third quarter of the fiscal due to the change in NPA recognition norm.

Related Topics