Ajay Piramal-promoted Piramal Enterprises Ltd. will venture into retail housing finance through its wholly-owned subsidiary Piramal Finance Ltd. The company will apply to the National Housing Board to set up a housing finance company, it said in a stock exchange filing.
Piramal, which so far focused on wholesale finance to developers, is now eyeing growth opportunities in the retail housing finance segment. In an analyst conference call in November last year, Khushru Jijina, managing director of Piramal Fund Management, had said that the outlook for the real estate sector has improved given that interest rates are headed downwards.
With the expectation of interest rates going down, housing loan developers say it (home loan rates) will go down to 7 percent. There is wide expectation of taxes coming down in the Union Budget, I think people are very convinced that this is the trigger for real estate to come back. So, yes, I think there we are also very confident and sure, this is where we think the long-term outlook looks good.Khushru Jijina, Managing Director, Piramal Fund Management
In May 2016, Piramal had announced its plans to demerge its finance business into a separate listed entity over the next two years. The Piramal Finance arm consists of wholesale lending, alternate asset under management, and investment in Shriram Group. It has close to 20 percent stake in Shriram Capital, the holding company of Shriram Group. Piramal also has investments in Shriram City Union Finance Ltd. and Shriram Transport Finance Company Ltd.
Piramal’s housing finance business will compete with Shriram Housing Finance, the housing finance company of the Shriram Group.
The financial services arm had a total portfolio of Rs 26,348 crore at the end of financial year 2015-16.