Unlike standard disbursements under ‘affordable housing’ initiatives, this new approach would assess applicants’ income through unconventional means, such as examining the transaction activity of a street vendor via QR code payments.

Another proposed method involves estimating the business revenue of a roadside eatery by analyzing customer volume and average bill size.

This proposal is being explored in light of recent Cabinet approval for government support to construct 3 crore homes under the Pradhan Mantri Awas Yojana (PMAY) 2024.

PMAY’s focus areas include slum rehabilitation, credit-linked subsidies for economically weaker sections, and interest subsidies for low- and middle-income groups, along with affordable housing partnerships.

A senior banker confirmed the initial discussions but clarified that “it would be inaccurate to suggest that public sector banks are being pushed by the government to pursue this.”

If implemented through the extensive network of PSU bank branches, such a scheme could boost participation in the central housing programs, which were launched in 2016 for rural and 2015 for urban areas.

However, this would involve banks engaging a new customer segment traditionally served by non-banking financial companies (NBFCs), whose loan approvals have recently slowed due to concerns raised by the Reserve Bank of India over their growth rates. Typically, NBFCs charge 1.5-2 percentage points higher in interest.

“While affordable housing loans may fall under the central scheme, banks usually request some form of documentation, like income tax returns or bank statements, even for low-income applicants,” noted another banker.

“What could be explored now is whether banks could conduct an on-site assessment of income. PMAY has faced some obstacles, like missing documentation and regions where properties are transferred without notifying the lender.”

Some in the banking industry believe a partial government guarantee could be beneficial for loans where formal income documentation is absent.

The Indian Banks’ Association recently discussed this idea, with a source mentioning, “This will require a different strategy. Even with income documentation, banks often face scrutiny on factors such as loan-to-value ratios, which the regulator has capped at 90% for loans up to Rs 30 lakh.”

Just last week, the Cabinet approved the PM-Vidyalaxmi scheme to support meritorious students facing financial challenges in higher education.

Under this scheme, students accepted into ‘quality higher education institutions’ (ranked by the National Institutional Ranking Framework) are eligible for collateral- and guarantor-free loans from banks and financial institutions to cover tuition and other course-related costs.

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To fund this acquisition, Weaver Services is raising capital from prominent private equity investors such as Gaja Capital and Lok Capital, aiming to secure up to Rs 800 crore, according to a company release.

CIFL, a modern player in the affordable housing sector, highlighted that the sale is part of its strategic shift towards focusing on its core businesses. The transaction is still subject to regulatory approval.

“The capital released from this sale will enable Capital India to expand further, leveraging strong equity capitalization and improving operational performance,” said Pinank Jayant Shah, CEO of Capital India Finance Limited.

Upon receiving regulatory approval and finalizing the acquisition, Weaver Services plans to introduce a range of innovative home loan products tailored for citizens of Bharat.

“Our primary goal is to empower self-employed individuals in the unorganized sector, especially in Tier 2 and Tier 3 towns. Weaver is dedicated to promoting financial inclusion, with a special focus on providing access to women borrowers who often face challenges in traditional financial systems,” the company’s release stated.

Weaver Services comprises a team of finance experts, including Satrajit Bhattacharya, who previously led the Investments and M&A division at HDFC Limited, along with other former HDFC executives.

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A Legacy of Visionary Leadership

Under Ratan Tata’s stewardship, the Tata Group grew into a global conglomerate, earning a reputation for its ethical business practices, philanthropy, and innovative ventures. The real estate arm of the group, Tata Housing, became a leader in affordable housing projects, with a focus on providing sustainable, quality living spaces. Tata’s emphasis on nation-building, combined with his vision of responsible corporate governance, has left an indelible mark on India’s urban landscape.

Real Estate Development: Tata Housing’s Role

Tata Housing, founded with a vision to deliver affordable and luxurious housing, set new benchmarks for the real estate sector. The company expanded its footprint in major Indian cities, offering a mix of residential projects that catered to diverse income groups. From affordable housing initiatives to luxury projects, Tata Housing played a key role in shaping the real estate market, always emphasizing sustainability and eco-friendly construction.

Ratan Tata’s personal interest in creating homes for the growing middle class and his vision of smart, sustainable urban environments contributed to projects that were well ahead of their time. Tata Housing’s involvement in large-scale urban planning projects, including smart cities, showcases the group’s long-term focus on building a better future.

Leadership Transition and Its Effect on Real Estate

Following Ratan Tata’s passing, one of the biggest questions for the real estate sector will be how Tata Group’s new leadership navigates the transition. With Tata Housing and Tata Realty being key players, any changes in leadership direction could influence ongoing and future projects.

However, the Tata Group’s strong corporate governance and succession planning ensure that the transition will be smooth. Tata Housing’s established business model, which prioritizes innovation, affordability, and sustainability, will likely continue driving the company’s projects forward, maintaining Tata’s vision of socially responsible development.

Impact on the Broader Real Estate Sector

The real estate industry as a whole might experience a period of reflection and adjustment following Ratan Tata’s passing. Investors and developers are likely to monitor how the Tata Group’s leadership transition impacts future real estate initiatives, especially in affordable housing and urban development. While the immediate impact may be minimal, the long-term influence of Tata’s legacy will continue to shape real estate strategies and practices in India.

Ratan Tata’s contributions to the real estate sector go beyond just building homes; they are about building a better India. His focus on sustainable, affordable urban living has set a new standard for the industry, one that will guide future generations of developers.

Conclusion:

While Ratan Tata’s passing marks the end of an era, his legacy in real estate will endure. The Tata Group’s commitment to responsible urban development, affordable housing, and sustainability will continue to shape India’s real estate landscape. Investors, developers, and homebuyers alike can take comfort in knowing that Tata’s values of integrity, innovation, and social responsibility will remain at the core of Tata Housing’s future endeavors.

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Sector-specific exemptions, such as those for tourism, were also ruled out. Goa Chief Minister Pramod Sawant hosted the meeting on Tuesday.

In attendance were Bihar Deputy Chief Minister Samrat Choudhary, Maharashtra Women and Child Development Minister Aditi Tatkare, Gujarat Finance Minister Kanubhai Mohanlal Desai, Kerala Finance Minister K N Balagopal, Punjab Finance Minister Harpal Singh Cheema, Uttar Pradesh Finance Minister Suresh Kumar Khanna, and central government GST officials.

According to a media statement issued post-meeting, the discussions focused on various issues concerning the real estate sector.

A key point was the debate over granting GST exemption on long-term land leases by private entities and sector-specific exemptions like those for tourism purposes.

After thorough discussions, the GoM reached a consensus that no further exemptions were necessary. GST will continue to be levied at the applicable rates, as stated in the release.

Other topics included the taxability of construction services supplied by cooperative housing societies to members in new or redevelopment projects.

This issue was also explored in depth during the meeting. The statement noted that “various perspectives emerged” and it was determined that more deliberation is needed, pending data collection from the states.

It was also decided that a Committee of Officers will examine these issues further, after acquiring the necessary information and data from the states, before a final decision is made at the next GoM meeting.

On the topic of reviewing the Rs 45 lakh value limit for defining an affordable residential apartment in metropolitan regions, the GoM resolved to seek input from Karnataka, West Bengal, Tamil Nadu, Uttar Pradesh, Maharashtra, and Delhi to form a consensus.

The matter of determining the value of land to calculate the cost of construction services for apartment sales was postponed for further review, as mentioned in the statement.

The next GoM meeting is expected to take place on October 25.

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Anuj Puri Anuj Puri, Chairman – ANAROCK Group

The early trends and the exit polls for the recently concluded elections for the 18th Lok Sabha elections anticipated the continuity of ongoing policies by the incumbent government. The real estate sector also seeks an assurance of predictability for this reason.

Over the last two terms, the current government made significant strides on the policy front and in the nation’s development. The economy grew with major investments in developing the country. The real estate industry always looks towards a stable government that will ensure no interruptions in the ongoing schemes and investments into infrastructure development. Above everything else, this unleashes the real estate potential of current and developing geographies.

The interim budget indicated that with the government’s policies unchanged, the mid-segment housing sector would witness targeted action and policy alignment that would further grow India’s housing sector. The mid-end (homes priced INR 40 lakhs to INR 80 lakhs) and high-end (homes priced INR 80 lakhs to INR 1.5 Crore) segments together recorded sales of 76,555 units in Q1 2024 which accounts for a share of nearly 59% of the total. The cumulative share supply for these segments in Q1 2019 was 47%.

With government continuity, we can look forward to a major boost for the affordable housing sector, this being a flagship scheme that had not fared well over the last term. Affordable housing (homes priced under INR 40 lakhs) sales in Q1 2024 recorded 26,545 units, which is just 20% of the total sales. Concurrently, supply in this critical segment had also dropped from 44% in Q1 2019 to 18% in Q1 2024.

Industrial and logistics parks, along with warehousing, will also look forward to further support for growth, with a massive potential for increased demand to be met in this sector thanks to an increased focus on manufacturing and improved connectivity.

Tourism and hospitality had also emerged as a bigger focus area for the government, as strongly indicated by the preliminary announcements in the interim budget earlier this year. This industry, too, looks forward to these plans being implemented as planned.

A stable government with a strong focus on development and increased expenditure to build assets reinforces the confidence of global investors who are hoping for a wider spread of options in India. Simultaneously, a strong opposition is always supportive of a vibrant democracy.

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Sai stressed his dedication to growth and pledged to meet public demands after the model code of conduct-related limitations expires, despite the limitations imposed by the recent election period.

Chhattisgarh Chief Minister Vishnu Deo Sai said during a public meeting in Balod, “The last two months were filled with elections. Nonetheless, I accomplished a lot in my 100 days as governor.

On December 13, we took our oath, and on December 14, the approval of 18 lakh PM Awad Yojana dwellings was received. We are going to start building dwellings for these eighteen lakh individuals as soon as the model code of conduct is lifted and we get funding from the Center.

Furthermore, our administration has granted nearly 12 lakh farmers 3716 crore rupees and a two-year bonus.”
“The society is making a lot of demands. There is currently a code of behavior; if it hadn’t been put into effect, I would have given you a lot. I promise that all of your society’s requests will be met as soon as the code of conduct is lifted,” he continued.

Notably, in February 2024, Prime Minister Narendra Modi inaugurated and laid the foundation stone for numerous development projects worth Rs 34,400 crores in Chhattisgarh under the banner of “Viksit Bharat, Viksit Chhattisgarh,” two months after the BJP won a majority in the state’s Assembly elections.

The projects serve several significant industries, including solar energy, coal, power, roads, and railroads.
Speaking virtually to the audience, the prime minister praised the progress made in Chhattisgarh and stated that the youth, farmers, and Nari Shakti will all play a major role in realizing the goal of creating a Viksit Chhattisgarh.

“We are advancing today with the determination of ‘Viksit Chhattisgarh’! It is the BJP’s creation, and only the BJP will make changes! Chhattisgarh boasts a richness of natural beauty and skilled young, and industrious farmers.

Chhattisgarh had it earlier and still has it, whatever is required for development. However, the Prime Minister stated that people who managed the nation for a considerable amount of time following independence lacked a broad vision.

The 11 members of the 18th Lok Sabha were chosen at the Chhattisgarh Lok Sabha election of 2024, which took place from April 19 to May 7, 2024.

On June 4, the results will be made public.

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This increase in outstanding home credit was ascribed by real estate and banking experts to pent-up demand and a robust rebound in the residential real estate market following the COVID outbreak.

The credit outstanding for housing (including priority sector housing) stood at Rs 27,22,720 crore in March 2024, up from Rs 19,88,532 crore in March 2023 and Rs 17,26,697 crore in March 2022, according to data from the Reserve Bank of India (RBI) on sectoral deployment of bank credit for March 2024.

Additionally, the data indicated that as of March 2024, the outstanding credit for commercial real estate was Rs 4,48,145 crore. March 2022 saw it at Rs 2,97,231 crore.

Numerous real estate advisors have reported large increases in both housing sales and prices throughout the last two fiscal years.

When contacted, Bank of Baroda Chief Economist Madan Sabnavis stated that the housing boom observed across all categories is the reason for the significant increase in home loans.

Sabnavis mentioned that the government’s initiative has specifically led to an increase in the affordable housing market.

“There was also some pent up demand for buying homes in the last two years after COVID which is getting reflected here,” he explained.

According to Sabnavis, the increase in housing loans would continue to be strong but would slow down to 15–25% because of the greater base.

Samir Jasuja, CEO and MD of PropEquity, a top provider of real estate data and analytics, commented on the RBI data and stated that the substantial increase in the number of homes launched and sold in the last two fiscal years is the main cause of the rise in the amount of housing loans outstanding.

“Major Tier-1 cities have seen high rates of price appreciation ranging from 50-100 per cent since FY 2021, which has influenced an increase in average loan size per property,” he stated.
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Jasuja believes that as long as there is a high demand for residential real estate, the home loan market would continue to grow.

The Indian real estate market, which provides support to over 200 auxiliary industries such as steel and cement, has been seeing robust demand since 2022. Prior to this, the market had been stagnant for over ten years due to low sales and steady prices.

In addition to the disruptions brought about by the new real estate law, RERA, GST, and demonetisation, the real estate industry suffered from a lack of confidence as many developers failed to complete projects after collecting money from clients. Nonetheless, the industry recovered after COVID since the pandemic highlighted the value of owning a home again.

Industry insiders predict that by 2030, the sector will have crossed the $1 trillion mark.

Senior Vice President and Group Head at rating agency ICRA Karthik Srinivasan stated that the merger of Housing Development Finance Corporation Ltd (HDFC) with HDFC Bank, which became effective in July 2023, is the reason behind the notable increase in retail housing loans that banks deployed in FY’24.

“Mortgage saturation level is steadily rising in India (around 12 per cent as of March 2024; the amount of housing loans due as a proportion of GDP), but remains fairly lower than developed economies, implying significant room for growth,” said the economist.

In the near to medium term, ICRA anticipates that the trend will continue, with overall home finance growing by 12–14% yearly, helped by strong demand.

The demand for homes has increased to an unprecedented level over the last two years, especially in the wake of COVID, according to Aakash Ohri, Jr. Managing Director of DLF Home Developers.

This increase highlights how people’s views on homeownership have fundamentally changed and how important it is to have a place to call home more than ever. In addition to providing a haven for end users, residential real estate has become a desirable place to invest, the speaker claimed.

Ohri went on to say that favorable government policies, alluring financing choices, and the public’s growing ambitions toward homeownership are some of the reasons for the extraordinary rise in home loan advances.

According to Mohit Jain, Managing Director of Krisumi Corporation, purchasers are giving priority to designated workspaces and comfortable living rooms, and demand for large homes has genuinely surged.

“We are witnessing a surge in interest for properties with separate home offices and outdoor space features that were once regarded luxuries, but are now essential for the modern homeowner,” he stated.

According to Jain, there is still a very bright future for the property sector, which means that house loan growth will probably likewise continue to be robust.

According to realtors, the industry is most likely in the second or third year of a protracted up cycle. Real estate trade associations CREDAI and NAREDCO have been pleading with the government to raise the tax breaks on home loans in order to further stimulate the demand for housing. They are asking for an increase in the deduction allowed for interest paid on home loans from the existing Rs 2 lakh to Rs 5 lakh.

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The official further stated that the promoter received a show-cause notice from the government after it took serious notice of the advertisement that was published in an English daily on March 2.

In a formal statement, the authority noted that the promoter had failed to properly describe the details in the advertisement, in violation of Section 61 of the Real Estate (Regulation and Development) Act of 2016, despite mandatory provisions under Sections 11(2) and 13(1) of the Act.

“It is undeniably true that the promoter, Countrywide Promoters Pvt Ltd, published a deceptive advertisement in an attempt to prevent potential allottees from making an informed decision. Accordingly, under Section 61 of the Act 2016, the Authority today imposes a penalty in the sum of Rs 50 lakh,” the judgment stated.

One full page of the advertisement features a picture of a garden/park called Garden of Dreams, but the other page features an image of a club that isn’t related to the project.

“However, the remaining portion of the advertisement highlights features like a squash court, a cutting-edge club house, a covered pool and spa, an outdoor library, revitalizing sculpted rocks, a coffee lounge counter, and other amenities that are obviously not included in the project. All of it is deceptive,” the directive stated.

Under the Deen Dayal Jan Awas Yojna Affordable planned Housing Policy 2016, Countrywide Promoters Private Limited is building Green Oaks, an affordable planned colony in Sector 70-A, Gurugram. In 2021, the developer registered the project with RERA.

It is quite evident that the promoter has released a deceptive advertisement for a DDJAY planned colony, using seductive imagery to give the impression that the project includes a clubhouse and other amenities that are not actually included.

“Section 7(1)(A)(i) is violated in this case. The order stated that “no specifics, data, or illustrations of the project’s actual layout or site plan have been provided to enable the potential allottee to decide upon investing in the project.”
HRERA further stated that the promoter was unable to have the registration details updated in accordance with the new style.

The project began in 2021, and in 2023 the layout plan underwent revisions.

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Due to internal reorganization and management changes, the insurance giant’s home financing division saw a slower rate of loan growth in the December quarter, at 5%, as its chief executive and managing director, T Adhikari, who took over in August, informed reporters.

According to him, the corporation has not placed as much emphasis on financing for inexpensive homes as it has on the salaried and high credit score segments up to this point.

“At present, affordable real estate is 8-10 percent of the portfolio, and we plan to take it to 20-25 percent of the loanbook in two years,” said Adhikari.

Given the need for this kind of financing, he claimed the market offers generous growth prospects and better margins to financiers.

Adhikari highlighted that the government’s initiatives will also provide further support and that the PM Awas Yojana will assist create demand for affordable housing, which gives the company a “upbeat” feeling.

Although the real estate industry as a whole is doing well at the moment, Adhikari noted that lenders are engaged in a rate war when it comes to lending for real estate projects, with some lenders offering rates as low as 8.75 percent annually.

He continued by saying that LICHFL is wary of the sector and has a gross non-performing assets ratio of 34% on its project loan exposure. To slow down the increase in loans, Adhikari explained that the internal restructuring involved moving credit appraisal to 44 recently opened cluster offices and replacing a 13-year-old lending platform with a newer one that could handle digital onboarding.

He also acknowledged that management changes may have contributed to the growth slowdown, but he quickly clarified that moving forward, the company’s loan book will expand at regular rates.

According to Adhikari, the company plans to increase its loan book by more than 15% in FY25. The board will meet in March to discuss the strategy.

He stated that while LICHFL has benefited significantly in terms of liabilities, the HDFC twins’ merger has not had any particular impact on domestic financiers.

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Aadhar was purchased by private equity firm Blackstone in 2019 for roughly $300 million as a result of the group’s wager on the rising demand in India for finance and affordable housing.

The IPO is Aadhar’s second attempt at listing following the cancellation of a $1 billion plan in 2022 due to market turbulence following the conflict between Russia and Ukraine.

According to these sources, Aadhar intends to submit its IPO paperwork to India’s market regulator in the upcoming two weeks.

In the midst of record-high stock markets in India—a rare bright spot for international investors—a deal would be the most recent instance of private equity investors seeking to sell off portions of their businesses.

A rapidly expanding economy and promises of political stability are driving the nation’s record-listing intentions at the moment. Its benchmark index, the Sensex, is trading close to record highs, and its stock market recently surpassed Hong Kong’s to become the fourth largest in the world.

“Blackstone intends to sell a portion of its holding to profit from the current state of the market. Since the IPO plan is still confidential, one of the two sources, who wished to remain anonymous, stated that timing is crucial for a progressive sell-down.

As consultants for its most recent initial public offering (IPO) filing, Aadhar has enlisted investment banks Citi, Nomura, and India’s Kotak and ICICI. The sources stated that a Mumbai listing is anticipated by May.

Citi, Nomura, and Blackstone all declined to comment. Aadhar, ICICI, and Kotak did not reply to requests for comments.

Aadhar provides house loans up to $18,000 to individuals with as low as $75 monthly income in a nation where escalating real estate costs have made major city property ownership more and more challenging.

According to the company, “economically weaker sections and low-income groups” receive the majority of its loans.

Although state-owned and private banks account for the majority of mortgage loans in India, more recent private equity-owned companies are vying for market dominance. In recent years, investors like Morgan Stanley and Warburg Pincus have placed bets on the industry.

Aadhar claims to oversee $2 billion in loans across 20 Indian states and 479 offices. According to its annual report, during 2022–2023 its net profit increased by 22% to $65 million, while its total income increased by 18% to $245 million.

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