PNB Housing Finance Targets Four-Fold Growth in Corporate Loan Book to ₹3,000 Crore

PNB Housing Finance is aiming to expand its corporate loan book by over four times to around ₹3,000 crore by the end of March 2027, according to Managing Director and Chief Executive Officer Ajai Kumar Shukla.

The corporate loan portfolio currently accounts for approximately 3 percent of the company's overall loan book, which stands at roughly ₹95,000 crore. The corporate loan book more than doubled to ₹689 crore in the year leading up to September 30, 2026. Shukla noted that the business commenced only around six months ago and is growing from a relatively low base, meaning the sharp percentage growth should be viewed in that context.

The company expects the share of corporate lending to increase to 8 to 10 percent over the next three years. Retail lending will continue to drive the portfolio, maintaining a 90 to 92 percent share. PNB Housing Finance plans to scale up corporate lending gradually, with the segment potentially accounting for about 5 percent of the loan book at an intermediate stage.

Regarding the broader business outlook, PNB Housing Finance is maintaining its loan growth guidance of 18 to 20 percent for the financial year. The company has already achieved a loan growth of 19 percent and aims to exceed its guidance, although the current target remains in place.

Shukla stated that the company has not observed any significant impact on loan demand following the recent 25-basis-point repo rate increase by the Reserve Bank of India (RBI) in October. Demand in the second half of the financial year is expected to surpass the first half, aided by the festive season. The company is closely monitoring market competition and notes that most institutions are performing better than they did in the second quarter.

On the impact of rising interest rates, borrowing costs are expected to increase, but the company retains the flexibility to revise lending rates. Approximately 60 percent of a repo rate increase is expected to translate into higher borrowing costs for the firm. For example, a 25-basis-point increase in the repo rate could result in an increase of about 15 basis points in borrowing costs. The company anticipates a marginal improvement in net interest margins as higher rates are passed on to existing borrowers, though this benefit will materialize gradually.

PNB Housing Finance's borrowing mix remains well diversified, with around 39 percent of borrowings linked to external benchmarks. The overall composition is expected to remain consistent with current financial disclosures.

Concerning asset recoveries, the retail recovery pool has declined to approximately ₹320 to ₹330 crore, while only two to three corporate cases remain in the recovery pipeline. Consequently, recoveries in the second half of the fiscal year are projected to remain broadly similar to the first half due to the shrinking recovery pool.

"PNB Housing Finance's strategy to scale its corporate loan book while keeping its core focus firmly on retail housing reflects a balanced approach to portfolio diversification. Growing from a small base allows the company to manage risk effectively while seeking incremental yield. Furthermore, maintaining steady loan growth guidance despite macroeconomic adjustments like repo rate changes demonstrates resilience and operational adaptability in a competitive lending environment." — Dr. Shishir Gupta, Founder & CEO, StartupLanes