The rating agency has maintained stable outlook on the housing financier's NCDs worth Rs 218.97 crore (reduced from Rs 280 crore).

The downgrade reflects the challenging operating environment for majority of non-banks in the mid-to-higher ticket size housing loan segment, increasing pressure on asset quality and higher leverage in view of the portfolio composition.

The rating takes into account the sizeable pan-India franchise of PNBHF, its fairly diversified funding sources, and sufficient access to funding, supported by the PNB brand, adequate liquidity factoring in the asset profile, and experienced management.

PNB Housing Finance is a deposit-accepting housing finance company. The firm provides housing loans to individuals for purchase, construction, repair, and upgrade of houses. It also provides loans against property, loans for commercial property, and loans for purchase of residential plots, and real estate development loans.

On a consolidated basis, PNBHF's net profit fell 21.8% to Rs 237.02 crore on a 0.2% decline in total income to Rs 2074.79 crore in Q3 December 2019 over Q3 December 2018.