Repco Home Finance expects increase in subsidy under PMAY for FY19

We expected an increase in subsidy under Pradhan Mantri Awas Yojana (PMAY) for FY19, said Yashpal Gupta, Chief Operating Officer, Repco Home Finance, after  government approved 33% increase in the carpet area of houses under the the scheme.

For middle income group (MIG) - 1, the carpet area has been increased to 160 square metre from 120 and for MIG - 2, the new limit is 200 square metre from 150.

Speaking to CNBC-TV18, Gupta said company's target market is tier two and three cities and we are diversifying into other states also.

So given the income level in smaller cities, it's much easier for clients to have a higher areas compared to metros like Mumbai or Delhi or Bengaluru and we see a large increase in that, said Gupta.

Gupta said company received subsidy of Rs 20 crore for FY18 and awareness level is also improving in the minds of the customers.

We are targeting the customer segment, which is credit starved, Gupta further mentioned.

Tamil Nadu market constitutes 60% of our portfolio. So this year, we are targeting about 18-20 percent growth rate,” he added.

Speaking on the same issue, Harshil Mehta, Joint Managing Director and Chief Executive Officer, DHFL, said subvention has definitely led to lot of awareness in MIG 1 and MIG 2 .

Speaking to CNBC-TV18, Mehta said the company already received subsidy for more than 7,000 cases of which 6,000 fall under economically weaker section, low-income group and the total subsidy for that comes to close to Rs 160 crore.

Commenting on cost of finance, Mehta said that in the last few months, we have seen how the interest rates, including G-sec yields have spiked up and it's having a cascading effect on the cost of financing.