Aadhar Housing Finance expects its existing capital, with a 40% adequacy ratio, to fund growth for the next four years. The company plans to grow its loan book by 20-22% annually while adding 50 branches each year through FY27.
Aadhar Housing Finance, an affordable housing lender backed by Blackstone, has stated it does not need to raise fresh capital for at least the next four years. According to CEO Rishi Anand, the company currently maintains a capital adequacy ratio of over 40%, which the management believes is strong enough to support its planned business growth without needing new equity.
The lender intends to increase its loan portfolio by 20-22% annually. To achieve this, the company plans to open 50 new branches every year until the end of the 2027 financial year. Aadhar Housing, which operates 628 branches, is specifically targeting smaller towns and district centers for this expansion. While the company is focusing on growth in these regions, it remains cautious about its lending activities in parts of eastern India and Kerala.
Asset Quality and Loan Portfolio
The company is focused on retail home loans, which accounted for 74% of its disbursements in the June quarter, with the remaining 26% coming from loans against property. While the gross non-performing asset ratio—a measure of bad loans—rose slightly to 1.31% in the recent June quarter due to seasonal factors, the management expects this to return to the 1.08-1.10% range by the end of the financial year. The company cited stable payment records, specifically mentioning consistent cheque bounce rates over the last two years, as a sign that its borrower base remains resilient.
Market Outlook and PMAY Impact
Management highlighted that demand in the affordable housing sector often remains underestimated by conventional data, as much of the activity in smaller markets involves self-construction and secondary market purchases that are not always tracked. Regarding the government's Pradhan Mantri Awas Yojana (PMAY) scheme, the company noted that it serves as a useful incentive for borrowers in smaller cities. The leadership suggested that increasing public awareness about the benefits of such schemes could be more effective than changing their current design.
Investors will likely track the company's ability to maintain its asset quality as it expands into new territories, as well as its quarterly progress in meeting the projected 20-22% loan growth. Future monitoring will also include the company's branch expansion pace and whether it can sustain its current lending margins while operating in a competitive affordable housing market.