PNB Housing Finance to Fund Small and Emerging Real Estate Developers

PNB Housing Finance is planning to expand lending to new and small-scale real estate developers as part of a strategy to improve margins, according to ET. The move aligns with the government’s focus on increasing the supply of affordable housing, which provides an opportunity for the lender to grow beyond lower-yield prime borrowers.

Currently, around 60% of the lender’s business comes from the prime segment. Construction finance and lending to affordable and emerging markets on the retail side offer higher yields compared to prime home loans.

Re-Entry Into Construction Finance

PNB Housing Finance has resumed sourcing business for construction finance, including lending to larger developers with a strong track record. The company had stopped financing such developers about four years ago after facing asset quality stress.

Loan disbursals under construction finance are expected to begin in the fourth quarter. To support this push, the lender has built a dedicated team of zonal managers and relationship managers focused on major cities and select state capitals.

Focus on Emerging Developers

The lender also plans to enter the emerging developer segment, which includes smaller and mid-sized builders catering to middle-income homebuyers. Banks generally avoid lending to these developers due to limited track records, making this segment reliant on informal or riskier sources of funding.

According to ET, entry into the emerging developer segment is targeted for the first quarter of the next financial year.

Growth Targets and Portfolio Mix

PNB Housing Finance, the third-largest mortgage lender after LIC Housing Finance and Bajaj Housing Finance, is targeting overall business growth of 17–18%. Managing Director Ajai Kumar Shukla told ET the strategy is to grow volumes while improving margins.

The lender aims to increase the cumulative share of affordable housing and emerging markets to 45–50% by FY28 from 39% currently. Earlier guidance under the previous management had targeted a similar mix by FY27.

Portfolio Performance and Asset Quality

The company’s corporate loan book shrank sharply to ₹272 crore at the end of December, a 78% year-on-year decline following a conscious scale-down. The corporate portfolio currently has no non-performing loans.

Affordable housing loans stood at ₹7,140 crore, growing 86% year-on-year. Emerging markets loans rose 20% to ₹24,998 crore, while the prime portfolio increased 8% to ₹49,793 crore. The gross non-performing assets ratio stood at 1.04% at the end of December.

PNB Housing Finance Share Price Performance

On January 23, 2026, PNB Housing Finance share price (NSE: PNBHOUSING) opened at ₹860.25, touching the day’s low at ₹836.10, as of 9:55 AM on the NSE.

Also Read: PNB Housing Finance Profit Up 7.7% YoY in Q3 FY26 Results!

Conclusion

PNB Housing Finance’s renewed focus on construction finance and emerging developers marks a calculated shift toward higher-yield segments. With improving asset quality, targeted growth plans, and increased exposure to affordable housing, the lender is positioning itself to enhance profitability while managing risk prudently.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a private recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.