Shriram Housing Loan-Book Grows 45% This Fiscal

Affordable housing player Shriram Housing Finance has said its AUM or live loan grew 45 per cent so far this fiscal to cross the Rs 5,000-crore-mark, making it the fifth-largest in the low-cost housing loan segment.

The company, however, missed the target by two months due to the third wave of the pandemic, which delayed collection and disbursals. Its Rs 5,000-crore AUM target was set for December 2021.

Shriram Housing Finance, promoted by Shriram City Union Finance, commenced operations in December 2011 and operates around 100 standalone branches and over 200 branches inside its sister concerns Shriram City Union and Shriram Transport Finance branches. Its footprint will cross 105 own branches (up from 77 last year) and 218 kiosks by the end of this month.

Had it not been for the third wave and the resultant curbs on our operations, which impacted collections, the AUM would have already crossed the Rs 5000-crore-mark in December as planned.

This also will impact the annual target of Rs 5,500 crore of live loans, and we should now be closing the year with Rs 5,200-5,300 crore of AUM, Ravi Subramanian, MD and Chief Executive of the firm said. But, he was quick to add that the good news is that they are now the fifth-largest affordable housing lender and hopefully will be the fourth-largest by the end of this month.

Aadhar Housing leads the segment with a loan book of around Rs 14,000 crore, followed by Awas and Repco with around Rs 10,000 crore each, and Homefirst is slightly more than Shriram's book.

“Hopefully, we will overtake the present number four by the end of this month and become the fourth-largest with an AUM of Rs 5,200-5,300 crore, Subramanian said, adding this will further cement our position as the fastest-growing firm in the segment with the highest quality -- our gross NPA declined from 5.6 per cent to an 8-year low of 1.49 per cent and should decline further to 1.1-1.3 per cent by the end of this quarter,’ Subramanian stated.

He attributed the massive improvement in the asset quality to the decentralised underwriting practices coupled with better customer selection, which has resulted in only 7 per cent of the nearly 1 lakh customers being first-time borrowers and more than enough emphasis on collection led to collection efficiency improving to 99.7 per cent in December and 97 per cent of the customers have paid at least one EMI in Q3.

A significant part of the demand is coming from the households that belong to the lower end of the income spectrum, especially where the sources of employment and income remain informal, he said, adding they have provided loans to over 1 lakh customers since its inception and the average ticket size is Rs 16 lakh.