While HFCs like Piramal Enterprises have a developer-heavy loan book, analysts at Motilal Oswal Securities believe that since it also owns an NBFC within the group, the firm could transfer part of the HFC exposure to the NBFC to meet the qualifying criterion.
The guidelines are also important from the perspective of investors. For example, the classification of systematically important HFCs would improve governance. Sanjay Shukla, managing director and chief executive officer at Centrum Housing Finance, says, “The systematically important classification would mean better monitoring as more data would be collected by the RBI. Also, it would ensure that the HFC is on the right track.”
According to the guidelines, an HFC can either lend to construction companies
within the group or to homebuyers of the developer. If it decides to finance the group company, the exposure is capped at 15 per cent of owned funds for the single company and at 25 per cent for the group. Some experts, though, are awaiting more clarity on this as lending to a group company is part of related-party transaction.
Exposure to developers is also capped at 25 per cent of qualifying assets, and could improve the lender’s asset quality.
An executive at a research house said, “The proposal to define the term ‘housing finance’ and setting a threshold of 75 per cent of qualifying assets towards housing loans for individuals shall keep a check on the riskier builder loans in HFCs’ portfolio. This should offer comfort to investors.”