LICHF bets on diversification to drive growth

MUMBAI: LIC Housing Finance plans to grow faster than the market even as it improves its margin by changing the composition of its loan book. The company has increased its lending rate by 25 basis points to protect margins and plans to grow higher-margin loans against property (LAP), lease rental discounting (LRD) and project finance.LICHF plans to have a dedicated affordable housing vertical in FY28 to manage the segment’s smaller loans through closer monitoring and faster recovery. The move comes as Q2 NIM fell 4 basis points year-on-year to 2.58% as funding costs outpaced lending yields. Net profit rose 12% to Rs 1,506 crore, while disbursements grew 11% to Rs 18,127 crore.Sandeep Kumar, MD & CEO, said that following the rate hike, about 35% of the portfolio will see the revision take effect from Nov 1, while the remaining 65% will be reset from Jan 1. Kumar said housing credit growth was showing signs of moderation in banks, reflecting caution amid macroeconomic and geopolitical uncertainties. However, he said underlying demand remained firm, with the industry continuing to see growth of 11% to 12%.