Manish Jaiswal, Managing Director and Chief Executive Officer, Grihum Housing Finance Limited

11 Jan 2024 , 04:04 PM

Poonawalla Housing recently underwent a rebranding, changing the company name to Grihum Housing Finance. This development follows acquisition of 99% stake in the company by US-based private equity firm TPG Capital.

Congratulations on the rebranding. How has the journey been so far post the change of guard?

The journey has been eventful and exciting since we adopted a new brand identity. The rebranding has empowered Grihum to realize its full potential as a standalone Affordable Housing Finance Company (AHFC). Grihum, a combination of 'Grih' (home) and 'Hum' (us), symbolizes our focus on housing finance and our customer-centric approach. Our primary clientele consists of Self-made Individuals (SMIs) from India’s semi-urban regions, also known as Real India. Grihum has a significant opportunity to reach numerous SMIs in the hinterlands who have yet to experience the joy of living in their own homes. Our alliance with TPG aligns with our goals, enhancing our ability to serve our customers. Recently, we received a notable rating from CRISIL (A1+ for short-term debt instruments, AA-/Stable for long-term ones), marking the highest rating for a PE-backed AHFC—a significant boost for us.

Share with us the key growth strategies of the company.

Our growth strategies leverage our strengths, vast experience, and the ongoing infrastructural changes in the country. With a planned Rs. 1,000 crore infusion from TPG, our plan is to deploy this amount and generate an additional Rs. 5,000 crore in organic book growth. Currently, our Assets Under Management (AUM) stand at a healthy Rs. 7,500 crore, with a CAGR of approximately 28% over the last six years. We aim to maintain this growth trajectory, doubling our AUM every three years. Our customer base exceeds 75,000, served by a network of 195 branches across 19 states. Notably, almost 85% of our customers are women (including Co-Borrower), illustrating our commitment to gender equality. As we strive to become a leading affordable housing fintech, we're undergoing a digital transformation, replacing our multi-stack IT infrastructure with a Low Code No Code (LCNC) platform to enhance customer experiences and scale operations. Simultaneously, with rapid urbanization and government initiatives like Swamitva, we are poised for a bullish future.

Does the company plan to enter into any new product segments? Help us understand the rationale for the same.

We have embedded insurance in our business model and are finalizing co-lending upstream and downstream partners.  Our primary focus remains on home loans, specifically our Real India model—Go Home Loan - Go Direct - Go Deep. We anticipate minimal changes in our product mix and shall stay focused with home loans comprising 70% of the portfolio and Loan Against Property (LAP) at 30%. Notably, 62% of home loans are taken by self-employed individuals, reinforcing our commitment to SMIs.

How many loans have you disbursed to new-to-credit customers so far? How are you managing the risks inherent in lending to such borrowers?

We have served over 75,000 customers, and this year we look to disbursing Rs. 3,000 crore, up almost 6x in 6 years. Most of the self-employed individuals availing home loans are first-time homebuyers. Despite the inherent risks, our approach involves completely secured, granular, and low-ticket lending. We avoid undue construction risks by carefully selecting our customers. With this strategy, we anticipate GNPA of just 1-1.2 % risk of which is factored into our business model. We maintain a positive outlook on this customer segment and remain committed to it.

Help us understand your company’s strategy on lending to green projects within the affordable housing space.

Considering the UN's projection of India's urbanization surpassing 50% by 2050, with nearly 600 million Indians in urban areas by 2030, we recognize the rising demand for housing and our responsibility to ensure sustainable development. We encourage green practices, such as using Fly Ash bricks, solar panels, rainwater harvesting systems, low-flush tabs, low-flow showerheads, and energy-efficient lighting systems.

The combined impact of green housing and financing is crucial for India to achieve its goal of becoming the world’s third-largest economy. This approach contributes to the construction and sale of more affordable homes, positively impacting GDP and fostering environmental sustainability.

How are you giving back to society?

Our employees actively contribute to the overall development of the locations we serve. We support the education of girl children, particularly those from families associated with the housing construction ecosystem. As part of our social responsibility, we have installed 224 Reverse Osmosis (RO) systems in police stations, providing clean drinking water for hygiene. This initiative has directly impacted over 1000 police officials and hundreds of daily visitors across locations in MP, UP, Rajasthan, Delhi, Haryana, Gujarat, Maharashtra, and West Bengal, forming an ongoing mission across ‘Real India’.

How are you managing credit risk within the company?

Our credit risk management is robust. Grihum boasts a diversified resource profile, collaborating with leading PSU Banks, Private Banks, Foreign Banks, NHB, and Capital market participants. Borrowings are sourced from over 23 financial institutions, each demonstrating deep conviction in Grihum’s business model. Banks utilize their internal rating assessment models, complying with BASEL III norms. With the committed capital infusion of Rs. 1,000 crore, the Company’s capital base will increase from Rs. 1,209 crore as of March 2023 to over Rs. 2,200 crore, enhancing the CRAR from 34.83% as of March 2023 to over 60%, and reducing leverage from 3.8x as of March 2023 to below 3x.

Is the company looking to get listed on the bourses in the next 2-3 years?

Currently, our focus is on building the institution. We have recently raised capital and are dedicated to establishing one of the best affordable housing fintech companies in the country.