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Ajay Piramal on the Housing Finance Business

Source: Conference Call of Piramal Enterprises Ltd

1 reply on “Ajay Piramal on the Housing Finance Business”

I think it is a classic case of ‘mis-guided strategy’ . Ajay Piramal does not understand this simple fact – which btw HDFC has mastered over the years and decades – that you lend to a person based upon his future cash-flow generation and continuity ability and not based upon the ‘value of asset to loan ratio’. If the latter had been true, Indian banks would not have faced the humongous NPA problems simply because the assets have always been there; the moot problem was cash flow problem (of course along with siphoning-off of the funds – though it is believed in the market that every businessman siphons off the funds and therefore this argument also gets nullified).

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