Edelweiss ventures into housing finance
Consistent with its strategy of expanding along adjacent markets, Edelweiss Group, one of India’s leading financial services conglomerate has commenced housing finance business. "The GDP per capita is about $3000 on Purchasing Power Parity basis. This is the stage at which consumption and retail businesses begin grow exponentially. This will need to be accompanied by a similar increase in retail lending. Retail financing thus offers one of the largest growth opportunities over the next couple of decades," Anil Kothuri, Executive Vice President, Edelweiss said.
As a first step to addressing this growth opportunity, Edelweiss is venturing into the retail housing finance business through Edelweiss Housing Finance Limited (EHFL), a subsidiary, which commenced operations in September 2010. "The current housing finance market size is about Rs1.5 trillion and we expect it to double by the end of FY15. We expect to capture about 2% of the market over the next 5 years," Kothuri added.
Currently EHFL operates out of Mumbai and plans to extend this reach to Delhi before the end of FY11. In FY12 it plans to venture into eight other metros and mini-metros, which together with Mumbai and Delhi represent about 60% of the housing finance market. This reach will increase to 20 cities by FY 13 cities with will cover 90% of the country’s housing finance market.
EHFL’s approach to the Housing Finance business will be based on offering differentiated products and a superior Internet based sales and fulfillment process for applicants" said Kothuri. "Over 2.5 lac customers already deal with Edelweiss for investments through our Wealth Management, Brokerage and Anagram Finance businesses. This gives us a ready pool of customers to tap into.