Shriram City Union Finance will shortly foray into the mortgage business through its wholly owned subsidiary, Shriram Housing Finance Ltd.
"We have just received approval from the National Housing Bank and we will shortly begin our housing finance operation," said Shriram Housing managing director and CEO Sujan Sinha.
At present, Shriram City Union is into financing activities like gold loan, SME loan and auto loan.
Shriram City Union has assured an equity comfort of Rs 100 crore in the housing finance arm, Sinha said.
"I am expecting a lending of about Rs 700-800 crore in the next 18 months. We will take a call on additional funding options of equity infusion after we reach around Rs 800 crore exposure level," he said.
Sinha said the new company will leverage the wide reach of its parent company to market mortgage products.
Asked how the company plans to overcome the present sharp rise in interest rate directly hurting loans like housing, he said, "We will target tier II and tier III cities and customers finding difficulty in getting credit from banks. This will ensure a healthy spread".
"We are aiming for gross spread of 3-4 per cent," Sinha said, addind that the entry into housing will offer a diversified portfolio of assets for the group.
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