LIC Housing Finance identifies Rs 19,610 crore for reclassification

LIC Housing Finance Limited identified Rs 19,610 crore of loans for reclassification from housing finance to non-housing finance in the quarter ended September 30, 2026. LIC Housing Finance said the exercise would not materially affect its aggregate loan assets, although its capital adequacy ratio will be recomputed in the annual financial statements.

Why is LIC Housing Finance reclassifying Rs 19,610 crore of loans?

LIC Housing Finance identified the Rs 19,610 crore portfolio after reviewing loans against applicable regulatory requirements for classifying housing-finance and non-housing-finance loans. The company disclosed the review in its September-quarter results, which its board approved on October 30, 2026, rather than describing it as a new lending programme or a loan transfer.

The filing does not provide a split of the Rs 19,610 crore by borrower type, property type, geography or product. It also does not state that borrowers’ repayment terms, outstanding principal or aggregate loan assets will change. The disclosed outcome is a classification change from housing finance to non-housing finance.

LIC Housing Finance said its main business is lending for the purchase or construction of residential houses. It said all other activities revolve around that business, there are no separately reportable operating segments under Indian Accounting Standard 108, and all operations are within India.

What will the reclassification change at LIC Housing Finance?

LIC Housing Finance said the reclassification has no material impact on aggregate loan assets, which stood at Rs 3,21,964.75 crore on September 30, 2026, compared with Rs 3,16,221.74 crore on March 31, 2026. Reported loans therefore increased by Rs 5,743.01 crore over the six months despite the classification review.

LIC Housing Finance said the effect on its capital adequacy ratio, or CAR, will be recomputed as part of the annual financial statements. The filing does not provide a revised CAR, a pro-forma ratio or the risk-weight treatment for the Rs 19,610 crore portfolio.

The company also reported no transfers or acquisitions of stressed loans or loans not in default during the quarter ended September 30, 2026 under Reserve Bank of India credit-risk transfer directions. Separately, it said there was no information requiring disclosure on co-lending arrangements as of that date.

What do LIC Housing Finance’s restructured-loan disclosures show?

LIC Housing Finance reported Rs 1,396.46 crore of accounts classified as standard following implementation of a resolution plan on September 30, 2026, down from Rs 1,555.13 crore on March 31, 2026. The disclosure includes accounts that had been cured, so the movement does not solely represent new stress or new resolutions.

Personal loans represented Rs 1,196.07 crore of the September closing balance, compared with Rs 1,342.73 crore at March-end. During the half year ended September 30, Rs 31.12 crore of the opening personal-loan balance slipped into non-performing assets, while borrowers paid Rs 175.10 crore; no write-off was reported for this category.

Corporate persons represented Rs 200.39 crore at September 30, compared with Rs 212.40 crore on March 31. LIC Housing Finance reported Rs 5.69 crore written off and Rs 12 crore paid by borrowers in this category during the half year, while no amount was reported as slipping into non-performing assets.

What is LIC Housing Finance’s project-finance exposure?

LIC Housing Finance had 88 projects under implementation with total principal outstanding of Rs 2,253.56 crore at the end of the September 2026 quarter. That compared with 85 projects and Rs 2,183.38 crore at the start of the quarter, while the company defined total outstanding as principal outstanding on loans and advances.

The company sanctioned 17 projects with Rs 45.88 crore outstanding during the quarter, while one project with Rs 14.30 crore achieved DCCO. A movement of 13 loans reduced opening outstanding by Rs 38.60 crore, covering items including earlier sanctioned loans where disbursement was not availed, loan closures, additional disbursements and repayments.

LIC Housing Finance reported no project-under-implementation account where a resolution process involving an extension of original or extended DCCO had been invoked. It also reported no resolution plans implemented, under implementation or failed, and no cost overruns funded in connection with such extensions.

How did LIC Housing Finance perform in the September quarter?

LIC Housing Finance reported standalone interest income of Rs 7,112.01 crore for the quarter ended September 30, 2026, compared with Rs 7,033.54 crore a year earlier. Finance costs were Rs 5,024.15 crore against Rs 4,996.17 crore, while impairment on financial instruments was negative Rs 92.57 crore compared with a charge of Rs 71.99 crore in the September 2025 quarter.

On a consolidated basis, profit after tax was Rs 1,506.59 crore in the September 2026 quarter, up from Rs 1,349.37 crore a year earlier. Consolidated profit before tax rose to Rs 1,919.99 crore from Rs 1,703 crore, while quarterly earnings per share increased to Rs 27.39 from Rs 24.53.

For the half year ended September 30, 2026, consolidated profit after tax was Rs 3,005.62 crore, compared with Rs 2,713.37 crore a year earlier. Net cash used in operating activities was Rs 1,614.07 crore, narrower than Rs 4,243.57 crore in the previous corresponding half year, while loans disbursed net of repayments were Rs 5,542.37 crore against Rs 4,171.72 crore.

Conclusion

LIC Housing Finance’s Rs 19,610 crore review changes the classification of identified loans without, according to the company, materially changing its Rs 3,21,964.75 crore aggregate loan assets. Its related disclosures showed that standard accounts under resolution plans declined by Rs 158.67 crore over six months, while project-under-implementation outstanding rose to Rs 2,253.56 crore.

The next disclosed milestone is LIC Housing Finance’s recomputation of the capital adequacy ratio in its annual financial statements, as the company has not yet stated the resulting ratio or the amount of any change. Future disclosures can also show whether the 88 projects under implementation result in DCCO extensions, resolution processes or cost-overrun funding.