Tata Capital Housing Finance AUM hits Rs 95,098 crore in Q2 FY27

Tata Capital Housing Finance Limited reached assets under management (AUM) of Rs 95,098 crore in Q2 FY27, up 26% year on year and 6% sequentially, while expanding affordable and micro housing into 23 new locations. Tata Capital Housing Finance reported profit after tax of Rs 552 crore, with return on assets of 2.5% in the September 2026 quarter.

How fast is Tata Capital Housing Finance growing?

Tata Capital Housing Finance grew AUM 26% year on year and 6% sequentially to Rs 95,098 crore as of September 2026. Management said its portfolio was diversified across home loans, loans against property, construction finance and affordable housing. The housing business’s year-on-year AUM growth matched Tata Capital’s consolidated 26% expansion, which took group AUM to Rs 3,08,030 crore.

The group’s growth was faster when Motor Finance was excluded. Tata Capital’s AUM excluding Motor Finance rose 32% year on year and 7% sequentially, compared with consolidated growth of 26% and 6%, respectively. Consolidated disbursements rose 29% year on year to Rs 51,665 crore in Q2 FY27, although management did not disclose a separate housing-finance disbursement amount.

The affordable and micro-housing portfolio grew more slowly than the total housing book in the reported periods. Its 22% year-on-year and 5% sequential growth trailed Tata Capital Housing Finance’s 26% and 6% AUM growth, respectively. Management nevertheless said affordable housing should progressively become a larger contributor to overall growth as the company deepens its presence in underpenetrated markets.

How is Tata Capital Housing Finance expanding affordable housing?

Tata Capital Housing Finance expanded affordable housing and micro housing into 23 new locations during Q2 FY27. Management said the additions formed part of a focus on scaling growth businesses and entering newer geographies. The company did not identify the locations or disclose the rupee value of its affordable and micro-housing portfolio.

The wider Tata Capital network added 24 branches on a net basis during the quarter, reaching about 1,515 branches across 1,094 locations in 26 states and union territories. Management said the additions were primarily focused on growth businesses, including affordable housing and micro housing. This means the 23-location expansion occurred alongside a broader branch-network increase rather than a separately disclosed housing-only branch count.

Management described digital distribution as the other mechanism for reaching existing and underpenetrated markets. Tata Capital reported a customer base of 9.2 million and said digital distribution could deepen customer relationships and create cross-sell opportunities. These are group-level capabilities, not standalone Tata Capital Housing Finance metrics, but management linked them to expansion across its growth businesses.

What distribution technology supports Tata Capital Housing Finance?

Tata Capital Housing Finance’s expansion is supported by Tata Capital’s physical network and group-wide digital lending infrastructure. Tata Capital said 99% of customers were onboarded through digital channels, 98% of retail disbursements used scorecard- and business-rule-engine-based decisioning, and 99% of collections were completed through digital channels.

Tata Capital also reported more than 180 digital partnerships, while artificial intelligence (AI)-led onboarding enabled more than 30 lakh customer interactions. AI-powered credit intelligence and decisioning engines processed more than 7.8 crore documents, with adoption above 95% in personal-loan and business-loan underwriting. These measures do not isolate housing finance, but they show the enterprise systems management cited when discussing scalable distribution.

AI-led workflows processed about 70% of retail applications across Tata Capital’s operations. Management said these workflows improved productivity, turnaround times and operating costs, while automated risk surveillance and AI-assisted customer engagement supported portfolio monitoring and collections. Tata Capital Housing Finance’s 23 new locations therefore sit within a network that combines branch additions with digital acquisition, underwriting and servicing processes.

What profitability did Tata Capital Housing Finance report?

Tata Capital Housing Finance reported Q2 FY27 profit after tax (PAT) of Rs 552 crore, return on assets (ROA) of 2.5% and return on equity (ROE) of 18.0%. Tata Capital’s consolidated PAT was Rs 1,660 crore, up 51% year on year and 7% sequentially. The call did not provide Tata Capital Housing Finance’s prior-period PAT, ROA or ROE for comparison.

Funding costs increased modestly at the group level. Tata Capital’s cost of funds rose to 7.33% in Q2 FY27 from 7.28% in Q1 FY27, while management said net interest margin declined marginally because of higher funding costs and a slight moderation in mortgage-business yields. No standalone cost-of-funds or margin measure was disclosed for Tata Capital Housing Finance.

Tata Capital Housing Finance decided to raise rates by 20 basis points from November 1, following the repo-rate increase. Tata Capital’s asset-liability committee approved a 25-basis-point increase for the parent’s floating-rate portfolio. Management said the group pricing action was expected to sustain net interest margin plus fee in Q3 FY27 and support an improving trajectory from Q4 FY27, without separately forecasting the housing subsidiary’s outcome.

What asset-quality indicators accompany the expansion?

Tata Capital reported consolidated gross Stage 3 assets of 1.9% as of September 2026 and a provision coverage ratio of 59%. Annualised consolidated credit cost declined to 0.9% in Q2 FY27 from 1.0% in Q1 FY27, and management said credit costs were 17% lower year on year, driven by improvement in the retail portfolio.

These are group-wide measures across secured and unsecured retail, housing, small and medium enterprises, corporate and Motor Finance portfolios rather than standalone Tata Capital Housing Finance figures. Management said slippages remained benign and attributed the performance to underwriting discipline and collections infrastructure. It also said it would continue monitoring macroeconomic conditions and business trends.

Tata Capital had 31,655 on-roll employees as of September 2026, with more than 80% deployed in frontline sales and collections. Headcount grew 6% year on year, compared with 26% year-on-year consolidated AUM growth. Management said investments in technology, data, AI and distribution were translating into employee productivity and operating leverage as the group expanded.

Conclusion

Tata Capital Housing Finance combined Rs 95,098 crore of AUM and 26% year-on-year growth with entry into 23 affordable and micro-housing locations in Q2 FY27. The affordable and micro-housing portfolio grew 22% year on year, below the total housing book’s 26% rate, but management expects the segment to account for a progressively larger part of growth as geographic coverage expands.

The next disclosed development is Tata Capital Housing Finance’s 20-basis-point lending-rate increase from November 1. Investors can also watch management’s stated plan to expand into newer geographies, whether affordable housing increases its contribution to AUM growth, and whether higher funding costs, which rose from 7.28% to 7.33% at Tata Capital during Q2 FY27, affect mortgage-business yields and margins.