Demand for housing loans has been extremely strong, said Keki Mistry, VC and CEO, HDFC, on Wednesday, adding that he does not expect interest rates to go much lower from current levels.
The State Bank of India (SBI) on Monday (March 1) announced that it was cutting interest rates on home loans starting from 6.70 percent onwards until March 31. Soon after the decision, Kotak Mahindra Bank also announced that it was cutting the interest rates on home loans by 10 bps to 6.65 percent.
“I do not see much downsides for rates going forward but over the last 8-9 months interest rates have been coming down. However, somewhere this will bottom out and my sense is that this will bottom out by the end of this month,” Mistry told CNBC-TV18.
Demand for housing loans has been strong, Mistry added.
“However, demand for housing loans has been extremely strong. I don’t want to talk of anything which is not in the public domain, but in the quarter of October-November-December, our individual loan disbursements were higher by as much as 26 percent compared October-November-December of last year (2019).”
On growth, Mistry said that 80 percent of growth has come from individual loans.
“On a 9-month period, individual loans on balance sheet basis constitute 76 percent of our loans and non-individual loans is 24 percent and of that 11 percent is construction finance and rest is a lease, rental discounting and corporate loans,” he said.
Mistry said HDFC does plan to raise capital anytime soon. “We raised capital sometime in August. We said we would be using that money for acquisitions and investment. However, we have not yet come across any real acquisition opportunity but if something does come up, we will certainly look at it,” said Mistry.
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