India’s housing finance ecosystem comprises two distinct segments—regular Housing Finance Companies (HFCs) and Affordable Housing Finance Companies (AHFCs). While both extend long-term loans for home purchases, they differ fundamentally in target customer, ticket size, regulatory treatment, risk profile, and market dynamics. Below is a detailed comparison, followed by sector growth trends and key financial metrics for leading AHFCs.

Key Differences Between the Two Categories

Parameter	Housing Finance Companies	Affordable Housing Finance Companies
Target Customers	All income segments	Economically Weaker Sections (EWS), Low-Income Groups (LIG), Lower-Middle Class
Average Ticket Size	₹25 lakh+	₹7 – 12 lakh
Property Value Limits	No specific caps	≤ ₹45 lakh (metros), ≤ ₹30 lakh (non-metros)
Interest Rates	~7 – 9%	~8 – 12%
Geographic Focus	Tier-1 (metros)	Tier-2/3 & rural
Customer Profile	Salaried, formal income	Self-employed, informal income
Risk Profile	Lower	Higher
Regulatory Treatment	General HFC norms	Priority Sector Lending status*

Affordable Housing Finance Companies (6 Listed)

Company	Market Cap (₹Cr)	Current Price (₹)
Aadhar Housing Finance	21,560	499
Aptus Value Housing	16,918	338
Aavas Financiers	13,302	1,680
Home First Finance	12,384	1,199
India Shelter Finance	9,784	906
SRG Housing	510	325

Regular Housing Finance Companies (13 Listed)

Company	Market Cap (₹Cr)	Current Price (₹)
Bajaj Housing Finance	94,155	113
LIC Housing Finance	31,343	570
PNB Housing Finance	21,119	812
HUDCO	21,000	212
Sammaan Capital	10,288	125
Can Fin Homes	9,845	740
Repco Home Finance	2,508	401
GIC Housing Finance	1,015	188
Reliance Home Finance	250	5
Star Housing Finance	198	25
India Home Loans	50	35
Ind Bank Housing	41	41
Sahara Housing	28	40

Market Statistics Summary

• Total Listed Housing Finance Companies: 19
• Affordable Housing Finance Companies: 6 (32% of total)
• Regular Housing Finance Companies: 13 (68% of total)
  

Growth Trends

Lending Segment	FY25–28 CAGR	AUM Target (FY28)	Source
Housing Finance Companies (HFCs)	15–19%	₹20 trillion	ICRA, NHB
Affordable Housing Fin. Cos. (AHFCs)	20–22%	₹2.5 trillion	ICRA

Housing Finance Companies: Growth Potential

CAGR Outlook:

• According to CareEdge Ratings and National Housing Bank (NHB), the Indian housing finance market—including HFCs and banks—is projected to grow at a 15–16% CAGR between FY25 and FY30.
• Industry AUM stood at approximately ₹33 trillion as of March 2024, with housing loans accounting for 14% of total systemic credit.
• ICRA estimates overall mortgage loans by NBFCs/HFCs to reach ₹20 trillion by FY2028, up from ₹13 trillion in March 2025, implying a 17–19% CAGR for HFCs over the next three years.

Drivers:

• Structural tailwinds: improved affordability, rising urbanization, nuclear families, “Housing for All” and PMAY schemes.
• Asset quality has stabilized, with most HFCs operating at low NPA levels.
• Government budget allocations and incentives are providing significant thrust.

Affordable Housing Finance Companies: Growth Potential

AUM Growth:

• ICRA projects that AHFCs will see AUM rise from ₹1.4 trillion (Mar 2025) to ₹2.5 trillion by FY28, representing a CAGR of 20–22%—well above the broader HFC sector’s growth.
• AHFCs make up about 11% of total AUM for all mortgage lenders, but their growth is “steep” due to strong demand for smaller ticket loans and underserved borrower base.

Key Comments (ICRA, NHB):

• Demand for home loans among EWS/LIG segments, lack of alternative credit, and PSL benefits ensure faster AUM growth for AHFCs.
• AHFCs face higher operational intensity (more branches/staff needed) but enjoy higher portfolio yields and strong risk-adjusted returns.
• NHB projects ongoing robust trends due to urban migration, budgetary incentives, and macro tailwinds.

Key Takeaway

• Both HFCs and AHFCs have strong long-term growth potential, with AHFCs projected to grow the fastest.
• This outperformance for AHFCs is driven by the surge in affordable housing demand, government push via policies and subsidies, and the relatively lower credit penetration among EWS/LIG groups.
• Government/rating agency consensus is: The next phase of India’s retail credit growth will be mortgage/affordable housing led, and the total mortgage opportunity could approach USD 1.5 trillion by FY35 as mortgage penetration rises toward levels seen in China and major economies.

All figures and forecasts above are strictly from government and rating agency sources (ICRA, NHB, CareEdge, RBI)