HFC Bond Issuances Hit Rs 45,700 Crore in H1FY25
Non-banking HFCs raised Rs 45,700 crore in bonds in H1FY25, 44% higher than last year, amid rising bank funding costs
Chennai: Bond issuances by non-banking Housing Finance Companies reached a multi-year high of Rs 45,700 crore in H1FY25.
With the increase in the cost of funding from banks, HFCs have moved towards the debt capital market to support their funding requirements. Bond issuances reached a multi-year high of Rs 45,700 crore in H1 FY25, which was 44 per cent higher than last year.
In general, bond issuances in India had touched an all-time high in FY24 at Rs 9.98 lakh crore, up from Rs 8.52 lakh crore in the previous fiscal.
However, ICRA expects that the sector would need Rs. 1-1.1 lakh crore of additional funding over and above the refinancing of existing maturing debt in FY2025 for the growth they expect.
The on-book portfolio of HFCs grew by around 14 per cent in Q1FY25. With demand expected to remain firm, ICRA expects the growth to be 12-14 per cent.
Funding availability to remain adequate for the sector. A steady growth in the industry portfolio is also expected and it will be driven by buoyant demand for individual loans.
HFCs witnessed a slight uptick in the reported gross non-performing assets in Q1 FY25, in line with the past trends. GNPA is expected to remain stable by the end of FY2025 at 2.1-2.3 per cent.
Though credit costs are under control and it would support profitability, net interest margins may see some moderation.