Strategic Priorities

Scaling deep,
growing strong

PNB Housing Finance sharpened its strategic focus on scaling the retail loan book, with emphasis on the high-growth Emerging Markets and Affordable Housing segments. This was complemented by a disciplined approach to asset quality, a diversified and cost-efficient borrowing strategy and investment in digital and AI‐led capabilities ‐ collectively reinforcing our position as a resilient and future-ready housing finance institution.

Our focus remains on strengthening the retail loan book, with emphasis on the Emerging Markets and Affordable Housing segments. These segments contributed 48% of total retail disbursements and 40% of the retail loan asset portfolio. Retail disbursements grew by 19% YoY, while the retail loan asset expanded by 16% YoY.

The Emerging Markets segment, catering primarily to suburbs of Tier 1 and Tier 2 markets, grew by 21% YoY to `26,820 crore, while the Affordable Housing segment, expanding across Tier 2 and Tier 3 cities, recorded strong growth of 61% YoY to `8,153 crore.

Prime

(` crore)
47,481
51,953
FY25FY26
↑9%

Emerging Markets

(` crore)
22,252
26,820
FY25FY26
↑21%

Affordable Housing

(` crore)
5,070
8,153
FY25FY26
↑61%

Total retail loan asset

(` crore)
74,802
86,946*
FY25FY26
↑16%

*includes pool buyout of `20 crore in Q4 FY26

The Affordable Housing segment continues to remain a key pillar of our retail loan portfolio. With a strong distribution footprint of 229 branches under this segment, we are steadily deepening our presence across Tier 2 and Tier 3 cities and beyond to address the growing housing finance needs of India. During the year, the Affordable Housing segment rebounded strongly, with Q4 FY26 disbursements growing 59% sequentially to `1,249 crore, remaining broadly in line with Q4 FY25 levels. We have facilitated over 5,000 subsidies under PMAY-U 2.0 in FY26, marking a significant milestone in supporting the Government of India’s ‘Housing for All’ mission.

Loan asset

(` crore)
5,070
8,153
FY25FY26
↑61%

Share of informal income segment in loan asset

(%)
29.9
30.1
FY25FY26
↑20 bps

Share of self-employed customer in loan asset

(%)
40.6
44.5
FY25FY26
↑390 bps

Branch count

(Nos)
200
229**
FY25FY26
↑29

**Includes 2 co-located branches

We strengthened our asset quality during the year, supported by a robust underwriting and governance framework. Gross NPA improved to 0.93%, and Net NPA declined to 0.57%, while Corporate NPA remained nil from FY25. Collection efficiency remained strong at 99.4%, and 689 properties were sold during the year as part of recovery efforts. Recoveries from the written-off pool remained healthy at `332 crore in FY26 resulting in a negative credit cost of 45 basis points.

Gross NPA

(%)
1.08
0.93
FY25FY26
↓15 bps

Net NPA

(%)
0.69
0.57
FY25FY26
↓12 bps

Collection efficiency

(%)
99.91
99.51
FY25FY26
↓40 bps

Recovery from written-off pool

(` crore)
332
336
FY25FY26
↓1.27%

We have a balanced borrowing mix where ~70% of the borrowing is in floating cost. Our borrowing stands at `71,199 crore as on 31st March 2026. Our incremental cost of borrowing also improved to 7.40%, reducing by 41 bps from FY25. Supported by strong credit ratings and prudent financial management, we were able to access funding from a diverse set of institutions. These factors have contributed to lowering our overall cost of borrowing and enhancing our financial flexibility. Going forward, we remain focused on expanding our funding base through NHB refinance, ECBs, and the debt capital markets.

Total borrowings

(` crore)
62,310
71,199
FY25FY26
↑14.26%

Cost of borrowings

(%)
7.86
7.57
FY25FY26
↓29 bps

CRAR

(%)
29.38
27.26
FY25FY26
↓212 bps

Tier 1 capital ratio

(%)
28.39
26.89
FY25FY26
↓150 bps

With a strong focus on digital transformation, we elevate operational efficiency and customer experience through technology-led initiatives. Digital channels now contribute nearly 12% of overall leads, while the ‘Infinity’ platform developed in-house has enabled a fully paperless onboarding and end-to-end loan processing journey, reducing turnaround times and operating costs. AI-led initiatives across the loan lifecycle, including intelligent calling solutions, pre-delinquency management, re-KYC, top-up offerings, and lead conversion, are further strengthening productivity, customer engagement, and sales effectiveness.

To optimise the transition from sanction to disbursement, we deployed a personalised WhatsApp engagement initiative. By reaching out to sanctioned-undisbursed (SUD) customers, the system captured intended disbursement dates and efficiently resolved loan shortfall concerns. This digital nudging strategy streamlined communication, addressed customer bottlenecks in real time, and significantly accelerated loan drawdowns.

SUD voice AI calling highlights

1,017 Total SUD pool
479 Interested 70% of connected
681 Connected 68% connection rate
301 Disbursement date captured 30% of the pool

At PNB Housing Finance, robust governance underpins our approach to sustainable growth and long-term value creation. Through FY26, we continued to reinforce our governance, compliance and risk management frameworks to enable responsible and resilient growth.

We strengthened our Board structure, enhanced ESG disclosures, and deepened enterprise-wide risk oversight. The Risk Management Committee and Audit Committee remained closely involved in monitoring credit, liquidity, cyber and operational risks, while our internal audit function was further calibrated to keep pace with evolving regulatory expectations for housing finance companies.

Aligned with the revised RBI guidelines for HFCs, we tightened controls around asset classification, provisioning norms and risk-based pricing, while accelerating the digitisation of compliance processes and audit trails to improve transparency, reporting accuracy and operational efficiency.

Our key governance priorities for the year included:

  • Independent Board oversight: A diverse, experienced Board supported by dedicated committees ensuring effective governance.
  • Strengthened internal audit: Comprehensive process audits paired with digitised reporting workflows.
  • Regulatory compliance: Sustained alignment with NHB and RBI norms, including timely execution of the PMAY subsidy scheme in partnership with NHB.
  • Enhanced ESG practices: Improved ESG disclosures, stronger data quality, and expanded social performance measurement within the Affordable Housing segment.

These efforts strengthen our governance framework — supporting financial resilience, regulatory compliance and stakeholder confidence, while driving sustainable, long-term value creation.