 India's mortgage business to boom: Keki MistryPublished on Mon, Nov 16, 2009 at 17:30 | Source : CNBC-TV18 Updated at Wed, Nov 18, 2009 at 13:45 37245 Investors following HDFC. Share this News with them.
Property prices are the biggest concern for HDFC's housing loan growth, the financial firm's Managing Director Keki Mistry has said. "However, property prices are still low apart from those in the metros," he said. Mistry was speaking to CNBC-TV18 in an exclusive interview. "The penetration of mortgage versus the GDP ratio is still very low," he said. "We are looking to double our home loan disbursements. We are confident of achieving loan growth of at least 20%. We are already growing at 24% quarter-on-quarter." Mistry said HDFC - the country's largest home loan lender - was also examining an initial public offer (IPO) for its life insurance business. Here is a verbatim transcript of the exclusive interview with Keki Mistry on CNBC-TV18. Also watch the accompanying video. Q: How was the mood at the conference? What are the key messages that HDFC had given to the investors? A: As far as this conference was concerned, I just went for one presentation, so I don't know what the mood amongst investors in this conference was. But by and large, I am meeting investors all the time. I think the investor mood is very strong, very bullish. People are a little worried about valuations - some of the long only investors in particular. But by and large, people are very happy with Q: The key message that you have given to the investors was that credit growth is still intact. What makes you so bullish? A: What makes us bullish? It is various things. If we look at the Q2 of financial year, which the period from July to September this year and compare that with Q1 which is April to June, then in terms of individual loan approvals, our growth was 26%. Individual loan disbursements were higher by 24% and this is on a sequential basis. So if we take the year as a whole and extrapolate then the growth could be enormous. Also, if you look at penetration of mortgages in So even if 7% was to go to 14% we would be looking at doubling of the existing stock of housing loans before we even remotely get to a level of saturation and that process by itself would take out almost a decade. Q: But the key thing that will maintain growth itself will be what Reserve Bank of A: I don't think and let's be clear, people do not buy a house because interest rates are higher or interest rates are lower. I have said this consistently for the last many years. People buy a house because the house is affordable. The house price is right, their income is good, they are confident about their future - that is the reason people buy a house. Nobody goes and buys a house because interest rates are half percent higher or lower. If you believe rates are higher at the moment you take a floating rate loan because when rates come down you will get benefit of floating rate loan. The biggest concern is property prices - property prices must remain affordable. Continued on next page...
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