Project Financing to Resume This Quarter at PNB Housing Finance: MD

KOLKATA: Mortgage lender PNB Housing Finance is poised to resume project financing operations this quarter after a hiatus of three years. The company is leveraging its strengthened asset quality to re-enter the developer financing segment—a space that previously posed challenges.

Managing Director Girish Kousgi revealed to The Economic Times that the lender already has a few builder loans in the pipeline, each ranging between ₹100 crore and ₹150 crore.

“We are likely to restart project financing within this quarter. Our goal is to build a project finance portfolio of ₹1,500 crore by the end of the current financial year,” Kousgi said in a telephonic interview.

The lender’s asset quality has shown marked improvement, with gross non-performing assets (NPA) falling to 1.08% at the end of FY25, compared to 1.5% a year earlier. The company aims to further reduce gross NPA levels to below 1% during the current fiscal.

Previously, PNB Housing had grappled with high gross NPAs of 7.6% at the end of FY22, about 60% of which stemmed from its corporate loan book. Back in FY20, the corporate loan portfolio stood at ₹14,614 crore, but the company began systematically scaling down its exposure thereafter.

As of the end of the last fiscal, assets under management (AUM) rose 13% year-on-year to ₹80,397 crore. On-book loan assets also saw robust growth, climbing 16% to ₹75,765 crore, with retail loans accounting for ₹74,802 crore—an 18% increase. Meanwhile, the company’s legacy project finance corporate book declined by 53% year-on-year to ₹963 crore due to a deliberate reduction strategy.

PNB Housing has provided an 18% growth outlook for FY26.

In terms of new business initiatives, the company launched a dedicated vertical earlier this month to accelerate its loans against property (LAP) portfolio.

“We now have a focused team handling LAP. This segment typically yields about 125 basis points higher returns compared to other lending categories,” Kousgi added.

He also noted that housing loan demand is increasingly being driven by the affordable and emerging market segments.

The company’s affordable housing loan business, initiated just a few years ago, surged by 183% year-on-year to ₹5,070 crore as of March. PNB Housing aims to grow this portfolio to ₹9,500 crore by the end of the current fiscal and further to ₹15,000 crore by FY27.

On Tuesday, PNB Housing Finance’s shares rose 4.5% to ₹1,030.65 on the BSE.