Active housing demand in tier II & III cities: DHFL

Kapil Wadhawan, chairman and managing director, Dewan Housing Finance Corporation Limited (DHFL), says that there is active and consistent demand in tier II & III markets, compared to tier I cities like Mumbai, Delhi and Bangalore, where demand is subdued.

Securitisation market has been dull except for some bilateral transactions which are taking place for sometime. The MBS market is dull. NIM has been consistently inching up to close to 3%. Below is the edited transcript of his interview to CNBC-TV18. Also watch the accompanying video. Q: Government will provide relief of 1% interest subvention on housing loans up to Rs 15 lakh and house costing below Rs 25 lakh. Does this news bring any relief for you and do you see demand to pick up in that segment?
A: There is active and consistent demand in tier II & III markets, compared to tier I cities like Mumbai, Delhi and Bangalore, where demand is subdued. This is a welcome move by the government and this shows that the government is also concerned as we are to promote affordable housing. Q: Two wheeler and car makers are complaining of slowing demand in rural demand as well, don't you see similar vibes in the housing space?
A: The Q1 has been fairy good and we are not seeing any slow down. We have posted a rise in both sanctions as well as disbursements. Demand for housing finance and loans in tier II & III markets are stable and things are still looking good. Q: How do you see NIMs this quarter?
A: NIM has been consistently inching up to close to 3%. The spate of interest rate increases has come to a halt. Small reduction in interest rates in the last few weeks has been positive. With decreasing interest rate and cost of funding we should see NIMs to improve in this quarter. Q: Will you be able to raise as much money on securitization here after?
A: Securitisation market has been dull except for some bilateral transactions which are taking place for sometime. The MBS market is dull. The guidelines are a dampener. We are looking at ways to see how MBS vehicle as a route can be used to raise cheaper resources and churn our portfolio. But that's an option of raising money which ideally we would have liked to see more in terms of contribution. Q: What is your view on NPLs with growth falling below 6% mark?
A: In our history of 28 years, we have seen many cycles. Our NPL position remains sound. In fact, March 31 and first quarter numbers are encouraging as there has been no increase in both net and gross NPAs. In fact, we are fully provided for net. We are not too concerned about NPAs.