The $103-billion group will invest another Rs. 300 crore through its subsidiary Tata Capital after already pumping in Rs. 200 crore by subscribing convertible preference shares so far this fiscal year.
MUMBAI: The Tata Group is placing a big bet on its home finance business with ambitions of matching Housing Development Finance Corporation (HDFC) in the next decade after a rapid growth in the business in the last seven years.
The $103-billion group will invest another Rs. 300 crore through its subsidiary Tata Capital after already pumping in Rs. 200 crore by subscribing convertible preference shares so far this fiscal year. The group has invested a total of 700 crore in the home loan company until August.
“We plan to become another HDFC. That’s our goal,” said R Vaithianathan, managing director at Tata Capital Housing Finance.”The promoters have infused money every year since we started in 2009. Last year, we raised 350 crore through convertible preference shares and this year we will rise. 500 crore, out of which 200 crore has already come.”
Since starting disbursing loans in 2009, the company’s loan book has been growing at an annual rate of 45-50%. Its loan book had risen to 15,300 crore at the end of August, up from 13,000 crore in March. The ambition is to scale it up to 30,000 crore by March 2018 1 lakh crore by 2022 and cross. “Our main growth will come from demand for home loan financing from tier-II and tier-III towns and outskirts of metros with a 60 lakh. we will also grow in construction finance and affordable housing, which is a focus for the government,” Vaithianathan said.
Net profit rose 67% to 175 crore in the year ended March 2016 from 105 crore in March 2015. To be sure, Tata Capital’s home loan venture is still very small compared to HDFC, which had a loan book size of 3.01 lakh crore as of June 2016. Other home finan ciers like LIC Housing Finance, DHFL and even Indiabulls are bigger than the Tata venture.
But Vaithianathan said the Tata Group will put its might behind its largest financial venture. “Tata Capital Financial Services has an around 25,000-crore book. Entity wise, the housing finance is the biggest book. The growth opportunities are very good,” he said.
Walls N Roof Comment:-
Tata’s move towards investment through Tata capital in portfolio of housing finance which is definitely going to boost its real estate sector further. It has Pan India Projects and is known for its quality construction and commitment on delivery. Tata brand carries huge weightage to incline buyers for its own project for e.g Tata Serein by Tata Group one of the most coveted landmark project located at Pokhran Road 2, Thane west attracted better sales rate in compasssion to other projects of same status such as sky suites by harmony lifestyles group. It is an IGBC certified residential property with unmatchable construction quality, energy efficiency and provides scintillating views of picturesque surroundings. this integrated approach if being perfect in finance as well as real estate sector promises another imminent proportion for growth of both the wings of Tata’s.