### **Overview** PNB Housing Finance Limited (PNBHF) is one of India's leading housing finance companies, ranked among the top three by loan assets. With over **37 years of operational history**, the company is promoted by **Punjab National Bank (PNB)**, India's first Swadeshi bank, and is registered with the **National Housing Bank (NHB)**. As of September 30, 2025, PNBHF manages **₹80,397 crore in total Assets Under Management (AUM)** and a **retail loan portfolio of approximately ₹75,765 crore**. The company has successfully transformed into a technology-led, retail-focused financial institution, targeting sustainable, scalable, and profitable growth. --- ### **Strategic Focus and Segmentation** PNBHF has strategically pivoted away from **Super Prime and corporate lending** to focus on **retail-centric, high-yielding segments**, particularly **Affordable Housing and Emerging Markets**. #### **Three Core Customer Segments:** 1. **Prime Segment** - Targets urban salaried and self-employed professionals. - Average loan ticket size: ₹35 lakh. - Yield: 9.0–10.0%. - Contributes ~58% of incremental disbursements in FY25. 2. **Emerging Markets Segment** - Launched in April 2024 to serve **Tier II and Tier III cities**. - Targets semi-urban and aspirational urban markets with higher-margin lending. - Average loan ticket size: ₹24–25 lakh. - Incremental yield: **9.73%** (up from 9.32% six months prior). - Accounts for **19% of retail loan assets** as of March 2025, with a growth target of **25% by March 2027**. - Offers a yield benefit of **~40–80 bps over Prime segment**. 3. **Affordable Housing (Roshni)** - Launched in **January 2023** as a flagship vertical targeting low- and middle-income households. - Rebranded from earlier ‘Unnati’ product; serves **Tier II, III, and IV towns**. - Loan book grew from **₹1,790 crore (Mar 2024)** to **₹5,750 crore (Jul 2025)**, with a **183% YoY growth in FY25**. - On track to reach **₹9,500 crore by FY26** and **₹15,000 crore by FY27**. - Average yield: **11.94–12.1%**; targeted to reach **13–15% by FY27**. - **60% of new borrowers are from informal income segments**, supporting financial inclusion. > **Milestone:** Roshni achieved ₹5,000 crore in AUM in just **27 months**—one of the fastest ramps in the Indian HFC sector. The combination of **Affordable and Emerging Markets** is expected to constitute **40–42% of incremental disbursements** and **~40% of the total loan portfolio** within five years, fundamentally reshaping PNBHF’s revenue and margin structure. --- ### **Geographic Expansion and Branch Network** PNBHF’s physical presence has expanded aggressively as part of its market penetration strategy. - **Total Branches (Nov 2025): Over 380 locations**, including: - **200 dedicated Roshni (Affordable) branches** - **60 Emerging Markets branches** - **120+ Prime segment branches** - **Geographic Presence:** Operates across **21 states** and **over 130 districts**, with new entries into **Punjab, Chandigarh, and Northeast (Guwahati)**. - **Zonal Distribution of Business (Jul 2025):** - **North:** 35% - **West:** 35% - **South:** 32% - **Top 5 States (as of Sep 2025):** Tamil Nadu, Uttar Pradesh, Maharashtra, Madhya Pradesh, and Rajasthan account for **73% of loan assets**, **down from 78% a year ago**, reflecting **improved geographic diversification** and risk derisking. - **Tamil Nadu leads in AUM**, followed by UP, Maharashtra, and MP—strategic hubs for both Roshni and Emerging Markets. --- ### **Distribution and Outreach** PNBHF employs a **multi-channel distribution model** combining **in-house teams, DSAs, and digital partnerships**. - **Distribution Network:** - **Over 14,000 channel partners** (DSAs, connectors, aggregators) - **PHFL Home Loans & Services Ltd.**, a wholly-owned subsidiary, handles in-house operations and contributes **over 50% of new customer sourcing**. - **Roshni Saarthi Program:** - Empanels grassroots connectors (nearly **2,000** as of 2025) to serve underserved, non-metro communities. - Key for first-mile and last-mile financial inclusion. - **Digital Partnerships:** - Collaborates with **30+ major loan aggregators** (Paisabazaar, LoanTap, NoBroker, Spoctree, etc.) - Digital platforms account for **over 50% of customer applications**. - **Technology Enablement:** - **Vconnect** platform engages 100% of DSAs. - **uConnect** streamlines vendor operations (legal, technical, field checks). --- ### **Technology and Digital Transformation** PNBHF is on a mission to become a **leading tech-enabled housing finance player**, investing heavily in digital infrastructure, cybersecurity, and data analytics. #### **Key Initiatives:** - **Digitized Loan Lifecycle:** - **ACE (Automated Customer Engagement):** End-to-end digital onboarding, e-KYC, e-Sign, video KYC. - Over **80% of Affordable segment onboarding is paperless**. - Automation reduced manual data entry by **36–37%**. - **Loan Origination & Management Systems:** - Cloud-based LOS implemented for Affordable and Emerging segments. - Transitioning to **Salesforce-powered CRM** for improved customer engagement and lead conversion. - New **Loan Management System (LMS)** enhances scalability. - **Data and Analytics:** - Centralized **data lake** and **Tableau/Python** dashboards provide real-time insights. - **AI/ML models** used for underwriting, risk profiling, delinquency prediction, and customer retention. - **Collections & Operations:** - Mobile app with real-time delinquency tracking and automated payments. - **77-member tele-executive team** with predictive dialer and CRM 360. - **Innovation & Security:** - **Zero-trust security framework** and 24/7 monitoring. - Exploring **generative AI integration** in sales and disbursement processes. - Innovation Hub in **Noida** to develop ROI-focused tools. --- ### **Asset Quality and Underwriting** PNBHF maintains a **strong asset quality** framework with disciplined underwriting and proactive collections. - **Net NPA:** **0.21–0.3%** (as of Jul 2025) - **Gross NPA:** Reduced to **1.5% by Mar 2024** from 3.83% in FY23. - **Bounce Rate:** Stable at **11%**. - **Two-Year-Old Book NPA:** Exceptionally low at **0.08%**, reflecting improved underwriting precision. - **Credit Underwriting Model:** - **Decentralized model** with credit teams embedded in branches. - **Hybrid approach:** Combines digital analysis with physical verification, especially for informal income. - **Credit Appraisal Memorandum (CAM)** is fully digitized with e-verification and bank statement analysis. - **Business Rule Engine (BRE)** automates 30% of salaried approvals (STP). - Segment-specific underwriting algorithms: - **Prime:** Rule-based, income-focused - **Affordable:** 50% income proof, 50% assessment (daily sales, supply chain) for informal borrowers - **Innovation in Collections:** - **Property Services Group (PSG)** recovers stressed assets via property auctions—**537 properties sold in FY25**. - **Recovery from written-off retail accounts:** ₹53 crore in Q4 FY25, resulting in **negative credit cost of -19 bps**. --- ### **Funding and Capital Management** PNBHF has diversified its funding base and improved capital strength. - Raised **₹2,494 crore via rights issue in May 2023**, improving **CRAR** and enabling access to lower-cost debt. - **Credit Ratings Upgraded to AA+** by India Ratings, ICRA, and CARE in FY24. - **Resumed NHB refinance facility** after a two-year gap. - Fixed deposit mobilization: **95,028 customers in FY25** through digital platform. - Targeting **ROA of 2.5%+ beyond FY27**, supported by yield improvements and lower borrowing costs. --- ### **Government and Market Initiatives** - **PMAY-U 2.0 Participation:** - Signed MoU with NHB to disburse subsidies. - Enrolled **5,500+ beneficiaries** and disbursed **₹750 crore** in subsidized loans within six months of launch (Sep 2024). - Strategic goal to **capture growth from the government’s 3-crore house mission**, particularly in non-metro regions.