PNB Housing Finance is strategically strengthening its presence in the affordable housing sector, anticipating a robust 40-45% growth in its retail loan assets within this segment for the current financial year. While the prime residential market continues to contribute the largest overall value, the affordable segment is poised for substantial percentage growth.
Ajai Shukla, MD and CEO of PNB Housing Finance, highlighted that the company expects its overall retail loan assets to grow by 18-20%, with the affordable segment leading in percentage terms despite its smaller base. In contrast, the prime business is projected to grow by 10-12%.
Growth Drivers for Affordable Housing
Several factors are fueling the expansion of the affordable housing market. Peripheral areas of major metro cities, along with emerging tier 3 and tier 4 cities like Visakhapatnam, Nagpur, Panipat, and Karnal, are becoming hotspots due to increased affordability. A significant catalyst is the Pradhan Mantri Awas Yojana (PMAY) 2.0, which provides interest subsidies on home loans for eligible families. Government data indicates over 1.25 crore houses have been sanctioned under PMAY-Urban and PMAY 2.0, with more than 1 crore completed.
Shukla also noted a societal shift contributing to this growth: an increase in multi-earner households. “There was a time when only one male member of the family was working. Over a period of time, things have changed. Now, when workers migrate to different parts of the country for work, not only is the male working, the wife is doing something, the adult children are doing something depending on their qualification and ability. So, the overall income among families in the affordable segment is increasing,” he explained.
Expanding Reach and Financial Performance
To capitalize on this burgeoning market, PNB Housing Finance is expanding its operational footprint. The company, which had a network of 404 branches by June 2026 (including 70-80 new branches opened in the preceding 18 months), is now enabling more of its prime and emerging market branches to source business in the affordable segment. Future expansion will primarily target tier 3 and tier 4 cities to further enhance its affordable business.
As of June 2026, the mortgage lender's assets under management (AUM) reached Rs 93,021 crore, marking a 13% year-on-year growth. Retail loan assets rose by 16% to Rs 89,178 crore. The affordable and emerging markets segment contributed 41% of retail loan assets, a figure expected to increase to 45% by the end of the current financial year and almost 50% within two years.
In related news, PNB Housing Finance's board of directors is scheduled to meet on September 7 to consider a proposal for fundraising through non-convertible debentures (NCDs). Shareholders had previously approved a resolution to authorize the board to offer NCDs or bonds up to Rs 10,000 crore on a private placement basis.