became chairman and managing
director of DHFL in 2009.
By 1996, when the company had
30 offices across the country, 80
percent of the loans that it gave out
were for homes that cost between
`1.5 lakh and `2 lakh (‘affordable
housing’ was not a term that had
still gained currency); the company
would finance 85 percent of the cost.
Today DHFL is India’s second
largest private housing finance
company—after HDFC—by assets
under management (`83,560 crore,
as of March 2017), and is growing at
18-20 percent year-on-year for five
years. It has 352 branches across 22
states and two Union Territories. The
price of DHFL’s stock (the company
was listed in July 1984), as of July
12, 2017, was `434.55 on the BSE,
double its price from `217.65 last
July. In FY17, its profits jumped by 27
percent to `927 crore and net income
rose by 21 percent to `2,217 crore.
The Wadhawans as of March
31, 2017, have a 39.29 percent stake
in DHFL; 60.71 percent is held
by a mix of public and corporate
entities, mutual funds, financial
institutions such as LIC, Morgan
Stanley, Copthall, Templeton and
investor Rakesh Jhunjhunwala.
The holding company, Wadhawan
Global Capital Private Limited, has
three housing finance companies
under it, each catering to a different
income segment: DHFL, the flagship
company and brand, has an average
loan ticket size of `16 lakh to `17 lakh,
with a customer profile comprising,
among others, owners of trading
or micro-, small- and medium
enterprises; Aadhar Housing Finance,
operating in northern and western
India offers an average home loan
of `7.5 lakh, DHFL Vysya Housing
Finance’s profile is similar to Aadhar’s,
but it operates in southern India.
Between DHFL and Aadhar,
the group targets 67 percent
of India’s population, saysHarshil Mehta, CEO, DHFL.
These companies find themselves
in a sweet spot because of the current
enthusiasm around affordable
housing within the realty sector,
which has been fuelled further by
the government’s push to provide
“housing for all (by 2020)” through
the Pradhan Mantri Awas Yojana
(PMAY), launched in 2015. This
government scheme focuses on slum
rehabilitation projects, providing
subsidies on interest rates on
loans between `1 lakh and `5 lakh,
and subsidies for beneficiary-led
individual housing constructions.
In the 2017 budget, the government
gave another push to affordable
housing by according it infrastructure
status, thus enabling realty developers
to access cheaper sources of finance,
such as institutional credit, and
reduce the cost of borrowing;
affordable housing projects now also
get priority sector lending status.
About three-fourths of the loans
that DHFL disburses qualifies as
relating to affordable housing under
several government schemes that are
linked to slum rehabilitation projects,
housing for low and middle-income
groups, and the government’s Golden
Jubilee Rural Housing Financeof Mumbai—gave out were funded by
the Wadhawan family, which had a
business of township development.
“He realised at that time that
the deficit lay not only in providing
affordable housing for the social
segment with low incomes, but also
in giving them access to affordable
financing options,” says Kapil
Wadhawan, 43, Rajesh’s son, who photographs: Joshua Navalkar
What makeS
it S uPer
Entered the affordable housing
segment when it was not popular
It has created a team of exclusive,
trained distribution agents to reach
customers in the country’s hinterland
DHFL reduced its cost of borrowing by
raising capital from the public
It has transformed holding company
Wadhawan Global Capital into a
diversified financial services providerShareholder return: 262%*
SaleS Growth: 25%**
return on equity: 24%***
* 3-year ** 3-year CAGR *** 3-year averageAugust 4, 2017 forbes india | 43Kapil Wadhawan
became chairman and
managing director
of DHFL in 2009