Q1 Results: Gruh Finance Sees NHB Circular Impacting Real Estate Industry
NHB circular won’t particularly impact Gruh Finance as it doesn’t have exposure to any subvention schemes, says MD Sudhin Choksey.
The National Housing Board’s advice to home financiers to desist from interest subvention schemes may not accelerate demand or supply in the real estate market, according to Sudhin Choksey, managing director of Gruh Finance Ltd.
“It’s a good measure from a prudence and regulatory perspective,” Choksey said in an interview to BloombergQuint.
According to Choksey, this NHB circular won’t particularly impact Gruh Finance as it doesn’t have exposure to any subvention schemes and around 70 percent of their customers are involved in self-construction properties in semi-urban and rural area. “This (rule) is more prevalent for high-rise apartments in metropolitan cities.”
Earlier this week, the NHB asked housing financiers to desist from offering loans under subvention scheme, in which real estate developers offer to service interest on housing loans on behalf of borrowers for an agreed period.
Demand To Improve From Festive Season
Gruh Finance also expects demand to improve from Dusherra and Diwali festivals in the third quarter when customers traditionally opt to buy homes. Disbursements in the September quarter are expected to be muted as the first two quarters are seasonally weak for the company, said Choksey. Gruh Finance announced its June quarter results on Friday.
Gruh Finance Q1 Results 2019-20: Key Highlights (YoY)
- Net interest income remained flat at Rs 172 crore.
- Profit after tax came at Rs 116 crore versus Rs 115 crore.
- Margin at 3.84 percent versus 4.39 percent.
On Friday, Gruh Finance shares rose 1.57 percent to Rs 256.00 apiece on the BSE while the benchmark Sensex fell 0.14 percent to end the day at 37,882.79 points.