RBI Rate-Hike Bets Put Home Finance in the Crossfire

A possible RBI rate increase does not mean every housing lender gets squeezed equally. Jefferies expects housing finance companies with mostly floating-rate assets and more fixed-rate liabilities to benefit, as their lending rates can adjust faster than some funding costs. That could cushion parts of the home-finance sector if the October policy turns hawkish.

The Bear Case

The RBI has not announced a move, but forecasts point to a possible 25-basis-point hike—which...