Reliance Home Finance, a part of Anil Ambani-promoted Reliance Capital, said that with the implementation of the Real Estate (Regulation and Development) Act (RERA), property prices are likely to correct by about one per cent giving a much-needed boost to the stagnant market at present.
Ravindra Sudhalkar, ED and CEO, Reliance Home Finance (RHF), told BusinessLine that he expects property prices to correct by 0.5-1 per cent , especially in the affordable segment, and it will help boost the home finance business.
He said that the real estate segment has remained under pressure for the last three-four months post-demonetisation.
However, the government’s vision on ‘Housing for All by 2022’ is all set to boost demand and supply in the coming months.
“The focus on affordable housing, where property prices range from ₹15 lakh to ₹60 lakh, is likely to boost our business.
“With all the subsidies and tax sops that the government is providing, the segment is growing at 28 per cent compared to the overall real estate growth of 19 per cent,” Sudhalkar said, adding that the company also expects major demand coming from the government’s ‘Smart City’ initiative.
“If all these initiatives are on track, then we expect our AUM (assets under management) to reach ₹50,000 crore by 2020,” Sudhalkar said, adding that the company’s total AUM at present is ₹13,022 crore.
The company is also strengthening its distribution capabilities through presence in more than 100 locations this year.
The company, which posted its first quarter results today, saw profit after tax rise 50 per cent to ₹45 crore. Total income for the quarter rose 58 per cent to ₹374 crore.
The company’s loan disbursements, at ₹2,655 crore, were up 68 per cent.
On disbursements, Sudhalkar said that the average age of a borrower has come down to 27 years and they are availing loans digitally in a convenient and faster manner.
Listing on the anvil
He also said that the company will be independently listed on stock exchanges by the end of the second quarter and has received approval from the National Company Law Tribunal (NCLT) for shareholders’ meeting on demerger, a move, Sudhalkar said, that will create more value for its existing shareholders.
For every share held in Reliance Capital, shareholders will get one share of Reliance Home Finance after listing, he added.