Viswanathan stated, “We are still waiting for clarification on whether housing finance companies (HFCs) as a whole are excluded or whether only the housing portfolio is excluded. If at all we have to take a higher risk weightage on the non-housing portfolio, that is 13% of our portfolio. That should probably impact our capital adequacy by probably 1-2%, because our capital adequacy currently stands at 45%. So, for a long time to come, it will not really make a major change for us.”

The uncertainty arises from the ambiguity regarding the risk weight assigned to the LAP portfolio and whether housing finance companies will be exempted from the potential adjustments. Home First Finance, like many other financial institutions, awaits clarification on the regulatory stance to better understand the implications for their operations.

Viswanathan elaborated on the potential impact, stating that a higher risk weightage on the non-housing portfolio, which constitutes 13% of Home First Finance’s overall portfolio, could lead to a 1-2% reduction in capital adequacy. However, he reassured stakeholders that the current capital adequacy ratio of 45% provides a buffer, minimising the immediate impact on the company’s financial standing.

He emphasised that among HFCs, their LAP holds the smallest share, indicating that it is not a primary focus or a core product for the company. He clarified that Home First Finance is not actively targeting or pursuing LAP, and the anticipated ratio is expected to maintain its current levels, ranging between 13% and 15%.

The CEO emphasised that, despite the anticipated impact, the change would not result in a significant alteration to Home First Finance’s financial landscape.

With a presence in 13 states across the country, Home First Finance is strategically positioned where 80% of the demand for affordable housing resides.

“At least for the next three-four years, we will continue to focus on these 13 states. Our aim is to deepen the distribution in these 13 states,” the CEO said.

Looking ahead, the company aims for substantial growth, targeting a doubling of assets under management (AUM) from the current ₹8,500 crore to an ₹20,000 crore by the fiscal year 2027.

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