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Sanjiv Bajaj, chairman of the home-loan unit of India’s largest shadow lender and part of one of the country’s oldest conglomerates, said banks have focused on retail business in recent years, given softer demand from corporate borrowers and this has made housing finance “a very competitive market at this point of time”.
But that is changing, Bajaj told Bloomberg Television’s Haslinda Amin and Menaka Doshi, a day after the company’s shares listed to a rousing welcome from investors. As India continues to grow, “corporate lending is restarting, so hopefully there’ll be a little less margin pressure,” on the home loan business, he said, adding the firm would be looking to expand in a “sensible manner.”
The company has been focused on seven or eight key markets, which account for most of the housing demand in the country, Bajaj said. “There is enough opportunity in these states. We will keep growing and add new cities each year,” he said.
Bajaj Housing Finance has been growing faster than the industry rate of 12% to 13%, he said. “We expect that to continue,” he added.
After almost a decade, the total inventory of vacant homes has fallen in the last year or two, Bajaj said. “That’s a good sign because this is a starting of another cycle of construction and lending to the sector for the coming years,” he said. In addition, outside the large metros of Delhi and Mumbai, home prices have been “reasonably steady and growing at a steady pace, ” Bajaj said.The company’s shares rallied as much as 10% to 181.50 rupees ($2.1654) Tuesday, taking their gains over IPO price of 70 rupees apiece to 159%.