The mortgage business, comprising home loans and loans against property, is likely to emerge as the largest segment for L&T Finance as the company pushes for inroads into the crowded market place with a digital first approach and innovative features.

The two segments form the second largest book in the company after micro finance. Given that the ticket size is higher in the home loan segment, it is likely to become the largest by 2026, Sudipto Roy, managing director & CEO of L&T Finance, said.

He, however, reminded that micro finance is going to always remain more profitable than the mortgage business.

Roy was in Calcutta to launch the new avatar of a home loan product that promises to offer a digitised process, home décor loan and a dedicated relationship manager.

The company had carried out a detailed market study which revealed that there are some gaps in the mortgage lending products. The new product will address those issues, Sanjay Garyali, chief executive of urban finance, said.

Disbursement of home loans has grown three times to ₹7,544 crore in FY24 and may touch ₹10,000 crore this fiscal.

At present, the ₹80,000 crore portfolio of L&T Finance is evenly split between the rural and urban sectors. Going forward, the urban portfolio may grow up to 55 per cent of the portfolio, Roy said. Apart from micro finance, tractor loans (farm equipment) are important constituents of the rural book, while two-wheeler finance and home loans are major pillars of L&T’s book.

Monthly home loan disbursement is ₹66,000 crore in India and Bengal (Calcutta) accounts for 6 per cent of that. The average ticket size of home loans for L&T Finance is ₹70 lakh. L&T Finance is working with top builders, including in Calcutta, to push loans.