Aadhar Housing Finance Exits from Small Builder Financing Business
Blackstone Group Inc.’s Indian subprime mortgage lender plans to exit its small builder financing business at a time when pain from the nation’s credit crunch abounds, with another victim claimed this week.
The RBI this week seized major non-bank lender DHFL, which held a controlling share in Aadhar until selling it to Blackstone in June
Blackstone Group Inc.’s Indian subprime mortgage lender plans to exit its small builder financing business at a time when pain from the nation’s credit crunch abounds, with another victim claimed this week.
“We are in process of phasing out this small builder loan portfolio to keep the company 100% retail focused as per mandate from new owners," said Deo Shankar Tripathi, 66, chief executive officer of Aadhar Housing Finance Ltd., in an interview.
The Reserve Bank of India this week seized major non-bank lender Dewan Housing Finance Corp., which held a controlling share in Aadhar until selling it to Blackstone in June.
After the RBI seizure of Dewan Housing, Tripathi said he expects some improvement in Indian credit markets next quarter.
India’s more than 15-month-old credit crisis has dragged economic growth down to its slowest in six years. The surprise seizure of Dewan underscores heightened efforts by authorities to limit the spread of defaults.
While more than 99% of Aadhar’s lending is already to individuals, about 45% of non-performing loans at the end of March were tied to its small non-consumer book, according to an India Ratings’ review last month. Blackstone’s capital injection lowered Aadhar leverage from 9.5 times of net-owned funds to 3.75 times, according to Tripathi.
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