Ajay Piramal, chairman of Piramal Group. (Photographer: Dhiraj Singh/Bloomberg)

Housing Finance To Soon Form 10 Percent Of Piramal Enterprises’ Lending Portfolio

Piramal Enterprises Ltd. looks to ramp up retail housing loans to 10 percent of its lending portfolio to shift focus from real estate developers.

Real estate loans—which contributed 72 percent to the overall loan book as of Dec. 31—fell 47 percent to Rs 3,900 crore sequentially in the October–December quarter. That led to a near 34 percent decline in total loans disbursed during the period, which stood at Rs 6,170 crore. Even as total loans fell, housing loans more than doubled to Rs 1,680 crore, according to data compiled by BloombergQuint from the company’s investor presentations, as the company refused to divulge details on loans disbursed.

The housing finance segment, according to Ajay Piramal, chairman of Piramal Enterprises, will grow to 10 percent of the overall loan book by March-end, from 7 percent as of Dec. 31. The non-banking financier will also focus on lending to small and medium companies not involved in the realty business, he said.

The decision to shift focus on housing loans comes amid a decline in project launches as the real estate market had to overcome the disruption due to reforms such as the goods and services tax and the Real Estate (Regulation and Development) Act, according to a Jan. 13 report by real estate data analytics firm PropEquity. New launches, according to the report, declined 9 percent in the October–December quarter year-on-year due to the liquidity crisis in the NBFC sector, leading to challenges for some debt-ridden real estate companies.