Fullerton India, a finance company involved in the non-banking sector is in plans to foray into the mortgage business as it received the license to establish a housing finance subsidiary. The National Housing Bank accorded the permission to Fullteron India in order to set up the completely owned subsidiary as Fullerton India Home Finance Company Limited (FIHFC).
By November this year, the housing finance company might start with its business with an initial paid-up capital of Rs 100 crore, claimed the Executive Vice President – Rural and Urban Business Head at Fullerton Vice President, Rakesh Makkar.
The new firm will handle catering to the affordable housing in the middle as well lower income segments largely via the Fullerton India network that has around 445 branches. As of now, NBFC has around 11 lakh customers.
Fullerton India will provide its customers the access to a extensive loan portfolio such as mortgage loans, loan against property and home loans as well. The average ticket size of the loans will range from Rs 6 lakh to Rs 7 lakh.
Talking of the development, Shantanu, the Managing Director of Fullerton India stated that as of now there is a very massive demand in the affordable housing segment in the country. Even the government has demonstrated its focus in order to address the shortage via the “Housing for All 2022 Policy”.
Fullerton India is right now in a very good position that makes it capable of catering to the burgeoning demand via the new housing finance subsidiary. The company has generated a profit of around Rs 301 crore in the last financial year that ended in March 2015.
Fullerton’s foray into the housing finance segment comes when most of the other MNCs have opted to exit the business by selling their units. It was AIG that came with the Info Pacific Housing Finance to exit at the earliest by selling to L&T Finance. In 2012, GE Housing Finance was sold to Magma Fincorp. There are reports that the stake of ICICI Home Finance might be sold to the investors. Major groups such as Bajaj Housing Finance and Hinduja Housing Finance are waiting to get the license from the National Housing Bank.
