Dismissing concerns over a slowdown in affordable housing, Aadhar Housing Finance Managing Director Rishi Anand said demand in the low-income segment remains resilient, with the company expecting to sustain around 20% growth over the next two-three years.
The marginal slowdown observed a couple of quarters back in developer-led affordable housing does not impact our segment,” Anand said, citing the company’s focus on self-construction and resale housing, which remain under-represented in formal data. About 35% of Aadhar Housing’s portfolio comprises self-construction, where borrowers build homes incrementally. “Our customers continue to build and buy. This demand is not captured in most reports,” he said.
Growth is expected to be supported by government initiatives such as PMAY 2.0 and the SWAMIH fund, along with a strong pipeline of projects nearing completion. “There is more than sufficient demand in the market,” Anand said, pointing to a large number of units currently under construction that will require financing.
Rising demand in smaller towns
Demand remains strong in smaller towns, with tier 3 and tier 4 markets driving volumes. While urban markets are growing at 17–18%, incremental disbursements are largely coming from the Rs 10–25 lakh segment, reflecting demand from low-income borrowers. Disbursement for the first nine months of FY26 stood at Rs 6,469 crore, up 15% on year.
The company said rising ticket sizes are not a strategic shift, but a result of inflation “As construction costs increase, loan requirements go up. We are not moving up the value chain,” Anand said, noting that average ticket size on the book has risen from Rs 6 lakh in 2010 to around Rs 10 lakh now.
Aadhar Housing
Aadhar Housing has seen improvement in early-stage delinquencies over the past two quarters, indicating a better credit behaviour. While early delinquencies may tend to remain elevated in the low-income segment due to temporary income disruptions, borrowers typically regularise payments because this is often the only property they own, and the emotional attachment remains high, he said.
The company has reported a stable performance in its loan-against-property (LAP) portfolio despite concerns in parts of the broader market. Limited exposure to rural and microfinance-linked borrowers has helped contain risks.
On competition, Anand said banks do not directly operate in the low-income segment due to the need for cash flow-based underwriting. Instead, they partner with housing finance companies to meet their priority sector lending targets. Aadhar Housing has assigned around Rs 5,000 crore of loans to banks.
The company has seen relief in its cost of funds. Since the majority of its book is floating in nature, as on February 10, it has passed on 15-bps rate benefit to all its floating-rate customers.
Maintaining its guidance, Aadhar expects to cross Rs 30,000 crore in assets under management by the end of FY26, with return on assets of above 4% and gross NPAs stable at around 1.1%.