Edelweiss Capital, the Mumbai-based financial group, may look to infuse Rs 40 crore -Rs 60 crore of equity capital into its housing finance subsidiary this financial year to support its future business growth. Edelweiss Housing Finance Ltd (EHFL), the wholly-owned subsidiary of Edelweiss Capital, has an equity capital base of Rs 40 crore as of now and have to infuse further capital to support the growth in the balance sheet.
“We aim to disburse around Rs 1,000 crore of retail housing loan in the present financial year. So, we will require Rs 40 crore-Rs 60 crore of equity capital infusion from the promoters’ side this financial year,” Anil Kothuri, executive V-P and CEO of EHFL said here on the sidelines of launching its operations here today.
EHFL has presence in Mumbai, Delhi and Bangalore. The housing finance com-pany aims to increase its pre-sence in nine cities in the current financial year and to 19 locations in the next fiscal. “As per recent survey, 19 locations contribute around 90 per cent of the mortgage market in the country and will continue to dominate the market for next 10 years. So, we want to focus on these key markets before entering other regions,” he said.
EHFL has disbursed around Rs 120 crore of housing loan by March, 2011 and its present loan book stands at Rs 200 crore as of now.
“We plan to disburse around Rs 1,000 crore of home loan in the current financial year,” he added.
The current financial mortgage market size is estimated to be around Rs 1.5 lakh crore and is expected to be doubled in the next five years in the country as per the housing finance company. “We want to capture 2 per cent of the market over next five years,” he added.
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Talking of margin pressure, he said though interest rates have hardened in the recent time, it was passed on to the end consumers. “There is less of a margin pressure on a newly-launched entity like us as most of the rise in interest rates have been passed on to the consumer,” he added.
He also said that tepid home loan growth would have least impact on the company. Housing finance companies have seen a drop in advances growth as home buyers are deferring their plans to own a home in the wake up rising interest rates. Also, competition is increasing in the retail home loan space as not only housing finance companies but also commercial banks are betting big in this growing segment. “We are aware of the fact that there is rising competition in the retail housing loan segment. However, we provide differentiated products that will suit to individual needs,” Kothuri said.
He also said that despite rising competition, there would be space for everyone as market penetration was still very low in the country.