Research Report

The AUM surpassed Rs. 10-lakh crore mark as of December 2025; ICRA expects healthy growth of 15-17% in HFCs’ AUM in FY2026 and FY2027  Macroeconomic uncertainties caused by West Asia conflict likely to weigh on funding costs while impact on asset quality shall remain a monitorable , Earnings are likely to remain healthy with RoMA of 1.9-2.1% in FY2026 and 1.8- 2.0% in FY2027, supported by low operating expenses and range-bound credit cost expectations.

• As on December 31, 2025, the AUM of HFCs stood at Rs. 10.2 lakh crore, increasing by approximately 15% YoY. ICRA expects healthy AUM growth of 15-17% in FY2026 and FY2027. HFCs have increasingly focussed on the NHL segment to cushion margin and competitive pressure, a trend likely to continue in the near term.
• The on-book HL portfolio of HFCs, NBFCs, and SCBs is estimated to have increased by 11% YoY to Rs. 42.2 lakh crore as on December 31, 2025. SCBs have meaningfully reduced their lending rates and led YoY growth in the segment (~11%), followed by HFCs (~9%) and NBFCs (~6%) in 9M FY2026.