Former HDFC employees set up affordable housing finance firm Weaver Services

livemint.com:

₹40 lakh has been seeing a decline in overall sales since the pandemic, to 19% in H1 2024 from over 38% in the same period before the pandemic in 2019. Over the last few years, affordable housing finance companies (AHFCs) have seen increased interest from investors amid growth expectations. Some of the companies have raised capital from the market in addition to some players getting capital from marquee investors.

The sector has seen some big-ticket deals like the acquisition of Aadhar HFC by Blackstone in 2019, followed by Bain–Adani Capital deal, TPG–Poonawalla Housing Finance deal and Shriram Housing Finance-Warburg Pincus deal. Affordable housing finance players cater to the under-served category of low-income or mid-income customers who may be salaried, working in the informal sector or self-employed running a small business. Typically the loan size is below ₹15 lakh.

AHFCs have been growing at a faster pace compared to HFCs. During FY24, AHFCs grew by 29% year on year compared to a 13% growth for HFCs. The outstanding assets under management (AUM) of all AHFCs stood at ₹1.1 trillion as of March 2024, compared to the total AUM of ₹5.9 trillion for all housing finance companies.

ICRA expects AHFCs to grow at 22-24% in FY25. "Affordable housing finance companies have demonstrated resilience across cycles. Strong fundamentals such as pristine asset quality, secular growth, book stickiness and healthy return profiles continue to generate high investor interest.