Budget 2024: Most housing finance company stocks traded with healthy gains after Union Finance Minister Nirmala Sitharaman signalled in her Budget 2024 speech that the government will continue to focus on affordable housing.
In her speech, Sitharaman said 3 crore additional houses in rural and urban areas in the country have been announced, and the necessary allocations are being made.
“Under Urban 2.0, the housing needs of 1 crore urban poor and middle-class families will be addressed with an investment of ₹10 lakh crore. A provision of interest subsidy to facilitate loans at affordable rates is also envisaged,” the FM further said.
Shares of Manraj Housing Finance, Sahara Housingfina Corporation and Star Housing Finance jumped 4-5 per cent, while those of GIC Housing Finance, Home First Finance Company India, Reliance Home Finance, Repco Home Finance and AAVAS Financiers rose 1-2 per cent during the session, in an otherwise weak market.
Experts believe the FM’s announcements on housing for the poor are positive for housing finance and cement companies.Â
“The government’s announcement to build 3 crore additional houses is a major boon for both housing finance companies and cement companies,” said Sonam Srivastava, Founder and Fund Manager at Wright Research.
“Housing finance firms stand to benefit from a surge in loan demand as more people seek to own homes. This increased business could lead to expansion and new market opportunities, particularly in rural areas,” Srivastava added.
However, they must also navigate credit assessment and risk management challenges, especially in the affordable housing segment.
Srivastava pointed out that cement companies will experience a surge in demand for their product, driving sales and potentially allowing for price increases.
“To meet the heightened demand, they may need to invest in expanding production capacity while also managing rising raw material costs,” said Srivastava.
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