Homing In

DHFL, an early entrant in affordable housing finance, has grown by targeting the hinterland with a dedicated task force

- Salil Panchal

When 35-year-old Rajesh Wadhawan started Dewan Housing Finance Limited (DHFL) in April 1984, it was with the intention of providing housing finance options to low-income clients. The first few loans that the company—based in Bassein (now Vasai), a far-flung suburb of 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 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.