Piramal Housing Finance, wholly-owned housing finance subsidiary of Piramal Finance, plans to achieve a loan book of Rs 15,000 crore by 2020.
The housing finance unit, which got its licence from National Housing Board on September 4 this year, already has assets under management (AUM) of over Rs 200 crore.
It has invested an initial equity capital of Rs 1,000 crore in the subsidiary.
The company will seek to fund the entire spectrum of real estate, from affordable to luxury, and cater to both salaried and self-employed individuals in the tier-2 and 3 cities.
Ajay Piramal, Chairman, Piramal Enterprises, which owns Piramal Finance, said, "This is a space of B-2-B-C (company to developer to consumer). We have built the Rs 200 crore with 15 of our developers and their 30 projects. We are not including construction finance to small people here… that will be done independently. This is just housing loans to tier-2 and 3 cities."
This arm will expand Piramal Finance’s business retail portfolio.
Piramal said, "Out of about 80 housing finance companies (HFCs), only 10 have asset size more than Rs 10,000 crore and about 16 have more than Rs 5,000 crore asset size. So there are not many large players and majority of HFCs do not understand real estate. Our strong partnerships with developers give us a unique edge."
He claims that the Piramal group, being second largest in real estate financing, will be at an advantage in its retail housing finance foray.
Piramal Finance's existing wholesale business has over Rs 35,000 crore in assets under management (across debt and equity), with funding across 300 plus projects and over 100 development partners.
Piramal said, "Out of about 80 housing finance companies (HFCs), only 10 have assets more than Rs 10,000 crore and a majority of HFCs do not understand real estate. Our strong partnerships with developers give us a unique edge."
Currently, it has an operational branch in Goregaon, suburbs of Mumbai and plans to open a branch in Thane soon.
Khushru Jijina, Managing Director, Piramal Capital said that the business will be rolled out in Pune, Bangalore and NCR regions.
On the retail side, Piramal Finance has an investment of Rs 4,583 crore with 20 percent stake in Shriram Capital and 10 percent stake in Shriram Transport Housing Finance and Shriram City Union Finance.
The company has a wholesale loan book of Rs 28,648 crore with real estate constituting Rs 24,924 crore in August 2017. The alternate assets under management were Rs 6,727 crore with real estate contributing Rs 5,727 crore.
On its competition with Shriram Group’s housing finance business, Piramal said, “Shriram in housing is very different catering to small towns and smaller amounts, while we will be in bigger ticket size loans. So it will be only complimentary and not competing with it.”
"We are confident that the unique business model being adopted by Piramal Housing Finance will add another dimension to our service offering and establish a blueprint for further growth," Piramal said.
The company will be able to deliver a seamless and customer-centric experience to all its stakeholders, including individuals, developers, agents, partners and now the target end users, Piramal said.
It will seek to fund the entire spectrum of real estate, from affordable to luxury, and cater to both salaried and self-employed individuals.
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