Sanjay Dutt, managing director and chief executive at Tata Realty & Infrastructure, echoed the view. “It is an opportunity for other NBFC to grow their market share and book.”
The merger of HDFC and HDFC Bank could open up more opportunities for alternative investment funds (AIFs) and non-banking lenders in real estate, according to bankers and fund managers.
“HDFC was the largest lender to developers. After the merger with the bank, its book will have compatibility challenges with banking norms. So somebody has to chip in,” said Vishal Shrivastava, executive director at Anarock Capital.
As per Reserve Bank of India norms, banks can’t lend for purposes such as land buying and pre-approval costs, which can be done by non-banking finance companies (NBFCs) and AIFs. Hence, NBFCs and AIFs will have the scope to step up lending to the sector, Shrivastava said.
He said NBFCs such as Altico, Indiabulls Housing Finance and IIFL have stopped lending to developers, and hence new and existing players have a huge opportunity to lend.
HDFC had developer loans of about Rs 1 trillion as of FY22.
The chief executive of a Mumbai-based AIF said HDFC Capital, ASK, Motilal Oswal and other AIFs will now try to garner as much as share as possible. “Tata Capital, Bajaj Finance, Piramal are also growing their real estate book fast,” he said.
The executive said that after the HDC-HDFC Bank merger, LRD (lease rent discounting) and LAP (loan against properties), and construction finance goes to the banking entity, but the bank will not be able to do land financing. AIFs and NBFCs will pick that up, he said.
Sanjay Dutt, managing director and chief executive at Tata Realty & Infrastructure, echoed the view. “It is an opportunity for other NBFC to grow their market share and book.”
A senior executive at an NBFC said the merged HDFC Bank would degrow its developer book because of its strategy. “Anyways they are selective in new deals,” he said.
He said home buyers are moving towards larger developers, many of whom, such as Godrej Properties and Macrotech, are going for an equity raise and debt from government banks at lower rates. “I feel equity raise will increase in real estate and debt raise will come down,” the executive said.
https://www.financialexpress.com/industry/banking-finance/hdfc-twins-merger-could-lead-to-more-real-estate-opportunities-for-aifs-nbfcs/3153897/
