Manish Sheth, the Managing Director and CEO of JM Financial Home Loans, expressed the company's aspiration to increase its assets under management (AUM) to Rs 50 billion by the financial year 2025-2026. He mentioned that the company, which currently has a capital base of Rs 4.5 billion and a leverage of three times, is also keen on expanding its presence in Maharashtra, Gujarat, Rajasthan, Madhya Pradesh, Telangana, Andhra Pradesh, Karnataka, and Tamil Nadu.
During the interview, Sheth provided insights into the growth strategy and financial details of the company. When asked about the growth plans, he responded that the retail mortgage business's AUM was around Rs 25 billion at the end of December 2023, showing a 65% year-on-year growth from the same quarter in 2022. The goal is to achieve an AUM of Rs 50 billion by FY26.
Sheth explained the borrowing strategy, mentioning that the borrowing profile involves bank term loans, long-tenor refinancing from the National Housing Bank, and debt instruments such as non-convertible debentures (NCDs). He emphasized the preference for long-tenor borrowing due to the long-term nature of home loans.
Regarding the expansion plan, Sheth outlined the intention to deepen the company's presence in existing markets before considering new regions for growth once disbursal targets are met.
When questioned about the evaluation of creditworthiness of loan applicants, Sheth highlighted the company's refined policies and processes over the years. Micro market-specific models have been developed to assess creditworthiness in small towns, considering collateral value and understanding the cash-flow cycle, especially for small business owners. On the credit underwriting front, a multi-layered vertical credit approval system is in place, incorporating effective delegation and the maker-checker concept.
