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AHFC’s AUM to rise to Rs 2.5 lakh crore in the next three years: ICRA
Jul-31-2025

Domestic rating agency ICRA has said affordable housing finance companies' (AHFC) assets under management (AUM) is set to rise to Rs 2.5 lakh crore, from Rs 1.4 lakh crore, in the next three years. It said non-bank lenders' mortgage portfolio is set to touch Rs 20 lakh crore by March 2028, from Rs 13 lakh crore in March 2025.

The agency's co-group head for financial sector ratings, A M Karthik, said the retail mortgage loan growth will be driven by robust demand and the restricted availability of alternative credit options due to ongoing issues with unsecured lending. He stated that the sector has traditionally demonstrated strong performance, marked by low loan losses and healthy business returns.

The housing finance companies (HFCs) accounted for two-thirds of the overall mortgage loans, while affordable HFCs constituted 11 per cent of the overall assets under management. The AHFCs have a higher share of self-employed borrowers and loans against property in their portfolio compared to other large HFCs focused on the prime borrower segments. 

The AHFCs have a sizeable share of smaller ticket loans, and their AUM growth has been quite steep in the recent past, resulting in low portfolio seasoning. Given their business model, AHFCs need an extensive network of branches and staff to manage loan origination and handle collections in case of overdues, Karthik said, recommending sustained stability in operations and prudence in credit policies as desirable for the segment.


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