Sundaram Home Finance, a wholly owned subsidiary of Sundaram Finance Ltd, aims to achieve ₹1,000 crore in disbursements in non-south markets this fiscal. This target is bolstered by network expansion and a strong demand for mid-segment home loans, particularly in tier 2 and 3 towns.
The company ended FY24 with a notable 27 per cent increase in disbursements, crossing the ₹5,000-crore mark. This growth was driven by strong buyer demand in southern markets and strategic expansion into non-south states. The company plans to target some of the select non-south markets to grow the disbursements, along with a continued focus on the southern markets.
“We posted strong double-digit growth in the non-south markets last year and are strengthening our presence further this year in the geographies we are already in. We see Rajasthan, Madhya Pradesh, Gujarat, and Maharashtra as vibrant markets for our home loan business,” said Lakshminarayanan D, Managing Director of Sundaram Home, told businessline.
In recent years, Sundaram Home has deepened its presence in small towns in the southern market while maintaining its focus on metros and larger cities. The expansion into tier 2 and 3 towns in the south has yielded significant growth.
The company plans to replicate this strategy in its non-south expansion, targeting mid-segment markets in small towns in select states. The company plans to increase the number of branches outside South to 25 over the next 12 months from 15 in FY24.
“As we expand our presence in the non-South markets, there too we will be focusing on the mid-segment in the smaller towns to drive our disbursements growth. The typical ticket size is around ₹35 lakh, he said.
Disbursements, which were just around ₹60 crore in non-south markets in 2020-21, when Lakshminarayanan took over as MD, have grown over tenfold in the last three years to about ₹700 crore. Also, the contribution from outside the South region in total disbursements has been steadily going up in the last few years and is currently at around 15 per cent, up from around 5 per cent in FY21.
Through ongoing expansion, Sundaram Home expects contributions from Rajasthan, MP, Maharashtra and Gujarat to rise further in the coming years.
Lakshminarayanan noted that tier 2 and 3 towns in those 4 states were growing rapidly. Economic prosperity, a rising middle class, and affordability are driving the home loan market. Real asset acquisition remains a priority for Indian households, fueling the growing demand for housing and financing.
The company is observing strong economic activity in tier 2 and 3 towns in Rajasthan and Madhya Pradesh and believes there are ample opportunities for growth in these states this year.
In Maharashtra, Sundaram Home is present in Pune, Thane, Nashik, and Nagpur. In larger cities like Navi Mumbai, where it recently entered, the company will target the mid-segment market. “Navi Mumbai is a growing market, and we are confident of achieving significant growth in our first full year of operations there,” he stated.
In Gujarat, the company operates in Ahmedabad, Vadodara, and Rajkot. With heightened economic activity, each of these cities presents growth opportunities in the mid-segment housing market.