· Mortgage loans by NBFCs and AHFCs to expand with a CAGR of 17-19% and 20-22% respectively, the next three years
New Delhi, July 30, 2025: Rating Agency ICRA Projects Retail MortGage-Backed Loans Offered by Non-Banking Financial Companions (NBFCS) and Housing Finance Companies (HFCS) to Expand to RS.20 Trillion by FY2028, FROM ~ RS.13 Trillion as of Marches of HOUST (AHFCS[1]) would rise to RS. 2.5 Biljoen van Rs. 1.4 trillion. ICRA predicts mortgage loans by the NBFCs and the AHFCs to expand with a CAGR of 17-19% and 20-22% respectively, by FY2028.
AM Karthik, Senior Vice President & Co-Group Head-Financial Sector Ratings, ICRA Limited said ‘In the next three years, the growth of the retail mortgage loan will be powered by a robust demand and the limited availability of alternative credit options due to continuous problems with uncovered lending. This sector has demonstrated traditionally strong performance, characterized by low losing losses and healthy business returns. “
The HFCs[2] About two -thirds of these total mortgage loans, and AHFC’s was 11% of the total AUM (RS.13 trillion) from March 2025.
The AHFCs have a higher part of the independent borrowers and loans against real estate in their portfolio compared to other large HFCs focused on the prime borrower segments (Prime HFCs). The AHFCs have a significant share of smaller ticket loans, and their AUM growth has been quite steep in the recent past, which resulted in low portfolio herbs. “Given their borrowing characteristics, the AHFCs have an operational intensive operating model compared to Prime HFCs. This would require an extensive network of branches and staff to manage the loan and to handle collections in the event of overfluits. Although they mitigate the credit risks in the operations in the operations in the operations with the operations in the operations in the operations with the operations with the operations in the operations with the operations in the operations with the operations with the operations with the operations in the operations bias in the operations in the operations in the operations bias in the operations in the operations in the operations bidding with the operations in the operations bidding in the operations bidding with the operations bidding in a higher business offer in the operations bidding in the operations bidding in the bias in the operations offer in the operations offer in the operations bidding in the operations bidding. Operations in a crucity in credit polic. Karthik added.
Based on the ICRA Steek test of some leading AHFCs, non-performance assets (NPAs) are good for the ICRA-AHFCs, accounting for 70%of the AHFC industry AUM, under control of 1.1-1.3%, with average credit costs during the past three years, with average credit costs. The AHFCs have an average LTV of around 55% and have a significant part of the loans that are expanded for self -construction of houses (~ 40% of AUM), which is expected to keep its credit quality under control.
Healthy company margins and low credit costs support AHFC income with their returns on average assets managed at 3.5-3.6% (based on ICRA Steek test of AHFCs), even if their operating costs remain increased compared to their most important loans-oriented colleagues. However, competitive pressure will steadily increase in the future of larger players, making improvement in operational efficiency critical when the proceeds are moderate and margins shrink with a steady increase in leverage. Nevertheless, the AHFCs seem to be well positioned, given their current capitalization (managed acceleration of ~ 3.5 times) and income to support their growth plans in the next three years. Given the above reasons, ICRA has a stable view of the AHFC sector.
Corporate Comm India (CCI Newswire)
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