PNB Housing Finance (PNB Housing) is re-entering the corporate lending space with plans to build a calibrated construction finance portfolio that will account for 5% of its overall loan book by FY27.
The company, which currently maintains a retail-heavy (99.6%) book, is looking to diversify while staying anchored in its core strengths of catering to the affordable and emerging market segments, particularly in tier-III and IV cities.
“We are expanding into construction finance with a clear focus on well-regulated, post-RERA projects. The H2 of FY26 should see some corporate loan disbursements happening,” said Executive Director Jatul Anand, adding that the company would be focusing entirely on construction finance.
In the September quarter, the housing finance company did not disburse any loans in the corporate segment. As of September 30, the total corporate loan book stood at Rs 332 crore, down 78% year-on-year. “We have maintained our growth guidance at 17-18% for FY26,” he said.
With MD & CEO Girish Kousgi stepping down on Tuesday, PNB Housing is in the advanced stages of appointing his successor, said Anand.
By March 2027, PNB Housing aims to scale up loan assets to Rs 1 lakh crore (Rs 79,771 crore as of September 2025), with affordable housing and emerging markets continuing to be the twin engines of growth. Both these segments are expected to contribute over 15% and 30%, respectively, reflecting the company’s shift towards high-yield, high-impact lending.
The company added 53 branches year-on-year, taking the count to 356, with plans to add another 40-50 branches by FY26, focused on tier II to IV cities.
These branches will primarily support affordable and emerging market growth. “Productivity per branch is targeted at Rs 2 crore, up from Rs 1.6-1.7 crore, and 50-75 new employees will be added in H2, mostly for affordable housing operations,” said CFO Vinay Gupta.
“We will also increase the share of loan assets to informal segments from 25-30%, and the aim is to have a formal-to-informal ratio of 60:40,” he said. “We are well capitalised to pursue our strategic goals and have no plans to raise equity for the next four-five years.”
PNB Housing posted a robust performance, with year-on-year loan book growing at 17%, in line with its annual disbursement guidance of 17-18%.
Net interest margins stood at 3.67% for Q2 and 3.7% for H1, slightly lower due to softening of investment yields. Business spreads, however, improved to 2.26% from 2.23% and are expected to remain stable around 2.3% for the second half of the fiscal.
The asset quality remained a standout metric. Gross NPAs improved to 1.04%, with a target to inch closer to 1%, positioning PNB Housing among the best in the industry, given its book size.
“Our robust collection mechanism played a key role, recovering Rs 59 crore from technically written-off pools and selling 178 repossessed properties, up from 98 in the previous quarter,” said Anand.
“While the affordable housing segment saw a sequential spike in bounce rates and delinquencies, attributed to the seasoning of the book and the nature of mortgage loans, our metrics remain well below industry averages and within internal guardrails.”