PNB Housing Finance to strengthen affordable segment coverage amid strong growth
The mortgage lender expects its retail loan assets to grow 18-20%, with the affordable segment expected to clock a much higher 40-45% growth, although on a smaller base.
- Sep 4, 2026,
- Updated Sep 4, 2026 3:27 PM IST
PNB Housing Finance expects its retail loan assets to grow 18-20% in the current financial year, with strong growth seen in the affordable housing loan market, while the prime residential market will continue to lead in terms of overall value.
“In terms of overall value, the prime segment will always have a higher contribution, but from the growth percentage perspective, affordable will have a larger growth. We are expecting to grow this year by 40-45% in the affordable segment, while in the prime business we intend to grow around 10-12%. But the incremental book will be much higher in prime, while the affordable base is low,” Ajai Shukla, the MD and CEO of PNB Housing Finance, told Business Today.
In the quarter ended June 2026, the mortgage lender’s assets under management stood at Rs 93,021 crore, a 13% year-on-year growth. Its retail loan assets rose 16% from a year ago to Rs 89,178 crore as of June 30, 2026. The affordable and emerging markets segment grew 27% and contributed to 41% of the retail loan assets. By the end of the current financial year, its contribution is expected to increase to 45% and almost 50% in two years.
“In the affordable segment, the peripheral markets are growing, because that is where the affordability is there. But, additionally, the Pradhan Mantri Awas Yojana (PMAY) 2.0 is also helping overall growth, with a substantial number of beneficiaries getting benefits under it,” pointed Shukla.
According to data released by the government last month, over 1.25 crore houses have been sanctioned under PMAY- Urban and PMAY 2.0, of which more than 1 crore houses have been completed and delivered to beneficiaries across the country. Further, 2.09 lakh houses were sanctioned under PMAY Urban 2.0 for EWS (economically weaker section) families across states. PMAY 2.0 provides interest subsidy on home loans for eligible families. Shukla said that PNB Housing Finance had provided benefits to 8,500 customers under the scheme.
At the same time, he also explained how the affordable housing segment is evolving with more members within a family now doing some work, which is increasing their income and in turn, their appetite to spend.
“There was a time when only one male member of the family was working. Over a period of time, things have changed. Now, when workers migrate to different parts of the country for work, not only is the male working, the wife is doing something, the adult children are doing something depending on their qualification and ability. So, the overall income among families in the affordable segment is increasing. That is actually giving fuel to the growth of the affordable segment,” Shukla noted.
It is not only the peripheral areas of major metro cities that are now seeing affordable housing development, but many new smaller cities and towns are also now emerging hotspots, from Visakhapatnam in Andhra Pradesh to Nagpur in Maharashtra and Panipat and Karnal in Haryana among others, according to him.
As the affordable segment is growing, so is the company’s focus on growing its business catering to this segment. PNB Housing Finance earlier had around 230-240 branches purely catering to the affordable housing segment. Shukla says now many more branches, including prime and emerging, are being enabled to source business in the affordable segment.
Overall, PNB Housing Finance had a network of 404 branches at the end of June 2026, with some 70-80 branches opened in the last 18-odd months, and as the network continues to expand, there will be major focus on the affordable segments.
“We will monitor the optimisation of the branches, the productivity, and then we will keep on adding. Whatever new expansion we do will be in the tier 3 and tier 4 segments to improve the affordable business further,” Shukla said.
The company’s board of directors are scheduled to meet on Monday, September 7, to take up the proposal of fundraising via non-convertible debentures (NCD).
At its annual general meeting in August, the shareholders had approved the resolution to authorise board members to offer for subscription NCDs or bonds up to Rs 10,000 crore on a private placement basis until the conclusion of the next AGM.
PNB Housing Finance expects its retail loan assets to grow 18-20% in the current financial year, with strong growth seen in the affordable housing loan market, while the prime residential market will continue to lead in terms of overall value.
“In terms of overall value, the prime segment will always have a higher contribution, but from the growth percentage perspective, affordable will have a larger growth. We are expecting to grow this year by 40-45% in the affordable segment, while in the prime business we intend to grow around 10-12%. But the incremental book will be much higher in prime, while the affordable base is low,” Ajai Shukla, the MD and CEO of PNB Housing Finance, told Business Today.
In the quarter ended June 2026, the mortgage lender’s assets under management stood at Rs 93,021 crore, a 13% year-on-year growth. Its retail loan assets rose 16% from a year ago to Rs 89,178 crore as of June 30, 2026. The affordable and emerging markets segment grew 27% and contributed to 41% of the retail loan assets. By the end of the current financial year, its contribution is expected to increase to 45% and almost 50% in two years.
“In the affordable segment, the peripheral markets are growing, because that is where the affordability is there. But, additionally, the Pradhan Mantri Awas Yojana (PMAY) 2.0 is also helping overall growth, with a substantial number of beneficiaries getting benefits under it,” pointed Shukla.
According to data released by the government last month, over 1.25 crore houses have been sanctioned under PMAY- Urban and PMAY 2.0, of which more than 1 crore houses have been completed and delivered to beneficiaries across the country. Further, 2.09 lakh houses were sanctioned under PMAY Urban 2.0 for EWS (economically weaker section) families across states. PMAY 2.0 provides interest subsidy on home loans for eligible families. Shukla said that PNB Housing Finance had provided benefits to 8,500 customers under the scheme.
At the same time, he also explained how the affordable housing segment is evolving with more members within a family now doing some work, which is increasing their income and in turn, their appetite to spend.
“There was a time when only one male member of the family was working. Over a period of time, things have changed. Now, when workers migrate to different parts of the country for work, not only is the male working, the wife is doing something, the adult children are doing something depending on their qualification and ability. So, the overall income among families in the affordable segment is increasing. That is actually giving fuel to the growth of the affordable segment,” Shukla noted.
It is not only the peripheral areas of major metro cities that are now seeing affordable housing development, but many new smaller cities and towns are also now emerging hotspots, from Visakhapatnam in Andhra Pradesh to Nagpur in Maharashtra and Panipat and Karnal in Haryana among others, according to him.
As the affordable segment is growing, so is the company’s focus on growing its business catering to this segment. PNB Housing Finance earlier had around 230-240 branches purely catering to the affordable housing segment. Shukla says now many more branches, including prime and emerging, are being enabled to source business in the affordable segment.
Overall, PNB Housing Finance had a network of 404 branches at the end of June 2026, with some 70-80 branches opened in the last 18-odd months, and as the network continues to expand, there will be major focus on the affordable segments.
“We will monitor the optimisation of the branches, the productivity, and then we will keep on adding. Whatever new expansion we do will be in the tier 3 and tier 4 segments to improve the affordable business further,” Shukla said.
The company’s board of directors are scheduled to meet on Monday, September 7, to take up the proposal of fundraising via non-convertible debentures (NCD).
At its annual general meeting in August, the shareholders had approved the resolution to authorise board members to offer for subscription NCDs or bonds up to Rs 10,000 crore on a private placement basis until the conclusion of the next AGM.