L&T Finance Holdings in October 2012 acquired Indo Pacific Housing Finance and started its own housing finance company, L&T Housing Finance. At the end of March 2014, the company?s a loan book was R2,000 crore and, on a standalone basis, it posted a net profit of R303 crore in FY14 compared to R143 crore in FY13. Vasu Ramaswamy, CEO, spoke to Shashidhar KJ on the company?s growth plans. Excerpts

Could you tell us how L&T Housing Finance grew its loan book in the last two years from R161 crore to R2,000 crore?

We acquired Indo Pacific Housing Finance at the end of 2012 and effectively our first full year of operations has ended on March 2014. The larger portion of our business today comes from the west and south, though we operate out of 17 locations. The retail home loan category continues to be our primary focus and we also do loans against property and construction funding, which again is largely focused on residential projects. We also see that as a good conduit for improving our retail home loan base. We draw from the L&T ecosystem not only in terms of giving loans to our employees, but also working with L&T realty and the ECC group, which does construction activities.

What will be your growth strategy now? What will you do in terms of low-cost

housing?

As a distinct strategy, we look at self-employed customers and have product offerings that become attractive for this group. That strategy has helped us grow the book while we also do the salaried segment.

The first year, we focussed on metro and tier-1 cities, because we wanted to get into the business and make ourselves visible. But as we move forward, affordable housing is a priority for us. This means we will be looking at increasing locations from our existing 17 to maybe 15-16 over the next 12 months, but with a focus on affordable housing typically in the ticket size segment of R15-20 lakh.

If there are opportunities for construction of affordable housing, we will be looking at it. It?s an important segment from an opportunity standpoint and it also allows to tap into much more efficient sources of funds, maybe through the refinancing route from the National Housing Bank (NHB).

What makes L&T Housing Finance diferent from others?

People in the self-employed segment generally look at opportunities for flexibility and higher eligibility. They may not be that price- sensitive but the salaried segment will be. So we have to make these offerings suit what the customer wants, which is what we have done.

We have different product offerings which suit the self-employed segment. Currently, the loan book has a ratio of 65% for self-employed group and 35% for the salaried

segment.

How do you see this company as a subsidiary of L&T Finance Holdings?

Our focus is to make this business a large important standalone business going forward. Over the next six to seven years we aspire to build a balance sheet anywhere between R20,000-22,000 crore.

We want to be a relevant player. We want to create value not only from a home loan point of view, but also want to make this an important business segment for us.