Bajaj Housing Finance Ltd. issues fresh guidance

The FY24-to-FY26 AUM CAGR was approximately 24.10%; including FY27 guidance, the implied FY24-to-FY27 CAGR is approximately 23.05%-23.75%. This trajectory remains below the company’s stated FY27 leverage range of 5.8-6.3x, although it implies a balance-sheet expansion that could move Debt-to-Equity higher.

AUM growth calculation

BHFL’s AUM increased from Rs 91,370 Crores in FY24 to Rs 140,706 Crores in FY26 ^[1].

• FY24-FY26 CAGR = `(140,706 / 91,370)^(1/2) - 1` = 24.10%
• Management’s FY27 AUM growth assessment is 21-23% ^[2].
• Applying that range to FY26 AUM implies FY27 AUM of approximately Rs 170,254-173,068 Crores.
• FY24-FY27 implied CAGR = `(FY27 AUM / 91,370)^(1/3) - 1` = 23.05%-23.75%, with the midpoint at approximately 23.40%.

Alignment with Debt-to-Equity

The latest reported quarterly Debt-to-Equity ratio was 4.17x in Q4 FY26 on a standalone basis ^[3]. Against the FY27 leverage assessment of 5.8-6.3x, this represents derived headroom of approximately 1.63-2.13x ^{[2] [3]}.

Analyst read: the growth plan is broadly consistent with the stated leverage range: management is contemplating faster AUM growth while allowing leverage to rise from the current 4.17x toward 5.8-6.3x. However, 5.8-6.3x should be read as a stated FY27 leverage assessment or operating range, not automatically as a hard Debt-to-Equity ceiling. The quarterly disclosure reports the actual ratio; it does not, in the cited data, establish a separate covenant limit. The key execution variable is therefore whether equity generation and capital retention keep pace with AUM growth while preserving the intended leverage band.

The June 2026 presentation indicates portfolio stability rather than a major reallocation: LAP and Developer/Construction Finance are targeted at approximately 10% and 11%, broadly in line with the stated portfolio mix of 10.3% and 11.4%, while Home Loans remain the anchor product at 54.1% ^{[7] [8]}. However, the presentation does not provide a single projected total mix for Home Loans, LAP and Developer Finance, and the FY24 Annual Report percentages required for an exact historical bridge are not stated in the retrieved extracts.

Product-mix bridge

The presentation says product-level mix can move by 2–3% as BHFL balances scale, risk and returns ^[10]. Therefore, the strategic message is not a sharp migration from Home Loans into LAP or Developer Finance. It is an intent to retain Home Loans and LRD as scale and risk anchors while using LAP and Developer Finance to enhance returns ^{[10] [11]}.

RWA and capital-adequacy implications

The mechanical relationship is:

`RWA = exposure × applicable regulatory risk weight`

and:

`Capital adequacy ratio = eligible capital / RWA`

The exact effect cannot be quantified from the presentation because segment-level regulatory risk weights, RWA density, capital adequacy and eligible capital are not disclosed in the cited extracts.

Directionally:

• Home Loans: Prime housing is identified by BHFL as a low-risk product ^[11]. A higher share of standard, well-secured residential mortgages would generally be more capital-efficient than a shift toward higher-risk property-backed or developer exposures, subject to loan-to-value, borrower and regulatory classification.
• LAP: LAP is explicitly treated as a return-enhancement product ^[8]. Its capital consumption per rupee of exposure could be higher than prime Home Loans where the applicable regulatory treatment is less favourable, particularly as BHFL expands toward near-prime and affordable customer segments ^[12].
• Developer Finance: Construction finance covers residential and commercial projects and uses milestone-linked disbursement and project monitoring ^[13]. It is therefore the segment with greater sensitivity to real-estate exposure classification, project risk and applicable risk weights; a larger share would normally increase RWA intensity relative to a prime mortgage book.
• Overall mix effect: Because the strategic LAP and construction-finance proportions are close to the stated 10.3% and 11.4% portfolio shares, the immediate mix-driven change in RWA density appears limited. Capital requirements would still rise with balance-sheet growth, while the more relevant incremental variable is the quality of growth within Home Loans—particularly the planned increase in Sambhav’s acquisition share from 14% in Q1 FY27 to 20% over the medium term ^[14].

Analyst read: the strategy appears designed to preserve a low-RWA mortgage core while retaining roughly one-fifth of the portfolio in higher-return LAP and Developer Finance. The key capital-adequacy risk is therefore less a headline shift in the three-product mix and more whether growth in Sambhav, near-prime LAP and construction finance causes regulatory RWA density to rise faster than capital generation.