Grihum Housing exploring co-lending tie-ups, insurance distribution: MD

Grihum’s potential as a standalone HFC has been unleashed since it can now reimagine its own business architecture without the shackles of a subsidiary structure. Grihum has a massive opportunity of reaching out to innumerable Indians in the hinterlands who have still not experienced living in their own homes. Our ability to cater to self-made individuals in semi-urban areas, stands substantially augmented given our strong alliance of goals with TPG.

Most certainly, we now have access to the global TPG ecosystem which provides us with opportunities such as sovereign funds, pension funds and multilateral agencies. There are a few players already talking to us and it’s a matter of time before this plays out. TPG has committed ₹1,000 crore, of which the first part has been infused and the second tranche will come when we need it. We want to first deploy this ₹1,000 crore and generate another ₹5,000 crore of organic book growth. With a brand like TPG, capital is not an issue. And between being worried about capital raising and running the business, I’d rather focus on the latter.

The country is experiencing phenomenal urbanisation on the back of last-mile connectivity driven by infrastructure development. We have been consistent in our operations with a singular focus for the last seven years. There’s an opportunity to mine in the sector because about one crore people don’t have their own homes. I believe the vision of ‘Housing for All by 2022’ should be augmented to 2032 because it will require at least a decade of hard work to realise this goal. There is deep starvation for liquidity, reflected in the over 2 crore loans already given by fintechs. Yes, there will be delinquencies and some hits and misses, but overall, there is terrific opportunity to look at this particular sector from varied lenses, one of which could also be home loans. As the economy grows, disposable incomes and consumption spends will increase, and borrowers usually don’t want to default on home loans. As long as we’re doing secured, granular and low-ticket lending, not taking on undue construction risks, and choosing our customers well, 95 per cent decisions should be correct and the remaining are accounted for in the model. So I’m very positive on this sector and we remain committed to this purpose and focussed on this segment.

We are evaluating co-lending opportunities with a couple of banks, and that will hopefully come into play by the next financial year. This apart, there will be more avenues to raise liabilities, opening up for the housing sector, such as residential mortgage-backed securities. The country’s largest HFC’s merger with a bank has also opened up massive limits with both banks as well as corporate bonds.

Our focus remains on the ‘First Home, Dream Home’ segment. While serving these customers, we also serve customers of homogenous nature of credit and collateral profiles who have affordable business loan needs. But we don’t ever see our product mix changing, home loans will remain at 70 per cent of the portfolio and LAP at 30 per cent.

We currently onboard around 3,000 customers a month and about 40,000 per year, but this capacity will grow by another 30-40 per cent next year. We are doubling our loan book every three years, about 70 per cent of which are home loans. A third of our loan book directly contributes to development of new self-construction properties in semi-urban and rural geographies. We focus on customers with average household income of ₹40,000-60,000 rupees per month and thus average home loan ticket size of about ₹10-12 lakh.

We look at the needs of customers, and many of them certainly need to secure themselves and their families and homes from the vagaries of life and nature. We have applied for a corporate agency license, and hope to get it soon. This will provide us the ability to partner with life and non-life insurers and also evaluate home credit insurance once the premium rates are affordable. We will invest ₹165 crore in reimagining our IT stack to create a deep digital arsenal for the company, which will significantly boost our ability to fetch many APIs and collaborate with more partners.