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Grihum Housing Eyes Insurance Distribution License by March for Product Diversification

Grihum Housing Finance, formerly known as Poonawalla Housing Finance, is anticipating the issuance of an insurance distribution license from the Insurance Regulatory and Development Authority of India (IRDAI) by March. The license, once granted, will enable the company to diversify its product offerings and generate fee income. Grihum Housing Finance is currently awaiting clearance from IRDAI and aims to leverage its strong borrower-lender relationships in the home loan sector to facilitate insurance products.

Financial Highlights:

  • The company is maintaining a monthly disbursal run-rate of approximately Rs 300 crore, and it anticipates concluding the current fiscal year with disbursements totaling Rs 3,000 crore.
  • Assets under management currently stand at Rs 7,500 crore, serving over 75,000 customers, with 62% falling under the self-employed category.
  • The average ticket size for loans in the self-employed category is Rs 10-11 lakh, with a loan-to-value ratio ranging from 60-65%.
  • Home loans constitute 70% of the company’s loan book, while loan against property and the non-housing segment make up the remaining 30%.

Growth Strategy:

  • Grihum Housing Finance emphasizes a genuine impact on the sector over chasing assets under management (AUM), focusing on affordable housing demand.
  • The company aims to double its AUMs in the next three years, with anticipated disbursements growing by 30-35% year-on-year in the next financial year.
  • To support growth, the company plans to borrow an additional Rs 2,500-2,600 crore in the upcoming financial year.

Strategic Initiatives:

  • Grihum Housing is collaborating with the National Housing Bank to establish a retail mortgage-backed securities platform, providing housing finance companies with an alternative source of funding.
  • Parent company TPG recently rebranded Poonawalla Housing Finance as Grihum Housing Finance, following TPG’s acquisition of a 99.02% stake in the housing finance company for a pre-money equity valuation of Rs 3,900 crore.*

Note: The deal, valued at 3.5x price-to-book, is the largest in the affordable housing segment.


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