May 20, 2009

The Tata Group is set to re-enter the housing finance business, which it had exited over six years ago.The new business will be part of the group's NBFC business under Tata Capital and will be operated through a wholly owned subsidiary, Tata Capital Housing Finance.According to Praveen P Kadle, managing director, Tata Capital, the group had exited the business earlier as Tata Finance was scaling down operations."The group had decided to move out of unviable businesses," he said. As a result, Tata Homefinance was sold-off to IDBI in 2003.

However, with the home finance business registering a compounded annual growth rate of around 18% over the past few years, the group decided to re-enter the segment.Tata Capital Housing has already received a certificate of registration from the National Housing Bank (NHB) and intends to have a network of 30 branches across the country in the next 12 months.Targeting the middle-income segment, primarily in the Tier II and III markets, the management expects to disburse housing loans of about Rs 400 crore in the first year of operations.