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India Shelter Finance Corporation Ltd

| Annual Report for Financial Year 2024-25

BULLISH SENTIMENT

Report Source

⬤3rd Jul 25

Summary : Strong growth driven by tech, expansion, and affordable housing.

Annual Report Analysis & Insights

Financial Disclosures

  1. Total Expenses: ₹68,671.22 Lacs (Standalone FY25).
  2. Finance costs: ₹35,487.55 Lacs (Standalone FY25).
  3. Employee benefits expenses: ₹22,908.45 Lacs (Standalone FY25).
  4. Other expenses: ₹6,472.50 Lacs (Standalone FY25).
  5. Undisputed Trade receivables (Less than 6 months): ₹38.32 Lacs (FY25).
  6. Total Income: ₹1,17,479.86 Lacs (Standalone FY25).
  7. Interest income: ₹94,228.57 Lacs (Standalone FY25).
  8. Fees and commission income: ₹11,454.21 Lacs (Standalone FY25).
  9. Other income: ₹1,029.94 Lacs (Standalone FY25).
  10. Net cash used in operating activities: (₹1,43,560.77) Lacs (Standalone FY25).
  11. Net cash used in investing activities: (₹6,057.84) Lacs (Standalone FY25).
  12. Net cash from financing activities: ₹1,56,618.61 Lacs (Standalone FY25).
  13. Net increase in cash and equivalents: ₹7,000.00 Lacs (Standalone FY25).
  14. Income tax matters: ₹660.03 Lacs (FY25).
  15. Goods and Service tax: ₹49.06 Lacs (FY25).
  16. Loan financing commitments: ₹48,518.87 Lacs (FY25).
  17. Bank guarantees: ₹25.00 Lacs (FY25).
  18. Total Assets: ₹7,74,557.31 Lacs (Standalone FY25).
  19. Total Liabilities: ₹5,03,875.34 Lacs (Standalone FY25).
  20. Total Equity: ₹2,70,681.97 Lacs (Standalone FY25).
  21. Loans (Net): ₹6,85,948.54 Lacs (Standalone FY25).
  22. Rent received from subsidiary: ₹1.20 Lacs (FY25).
  23. Gratuity contribution to Employees Gratuity Fund Trust: ₹225.00 Lacs (FY25).
  24. Remuneration to MD & CEO, CFO, Company Secretary.
  25. Commission and sitting fees paid to independent directors.
  26. Both standalone and consolidated financial statements are presented.
  27. Auditor's report covers both standalone and consolidated financials.

Corporate Overview

  1. Presence in 15 states across India.
  2. Focus on Tier II and Tier III cities.
  3. 266 branches as of March 31, 2025.
  4. Interest rate fluctuations, economic cycles, regulatory shifts.
  5. Acute housing shortage at the bottom of the pyramid.
  6. Climate change risks: loan defaults, declining property values.
  7. Inefficient practices lead to higher operational costs, non-compliance.
  8. Cyber threats and data breaches pose significant risks.
  9. 71.48% of paid-up share capital held by foreign entities.
  10. Funding sources include term loans, direct assignments, NHB refinance, ECB.
  11. Relies on PSU banks for extensive credit lines.
  12. Foreign currency exposure fully hedged via cross-currency swaps.
  13. Technology-driven, retail-focused provider of affordable housing finance solutions.
  14. Offers home loans and loan against property to low- and middle-income households.
  15. Operates primarily in Tier II and Tier III cities across India.
  16. Leverages innovative underwriting and digital processes for self-employed borrowers.
  17. Committed to making homeownership accessible to underserved communities.
  18. Reinforced foundation by fostering trust, driving efficiency, meaningful impact.
  19. India is a land of boundless opportunities, strong growth markets.
  20. Sustainable, resilient growth thrives on technology, expansion, and discipline.
  21. Low- and middle-income individuals in Tier II and Tier III cities.
  22. Includes small traders, masons, artisans, lab technicians, small IT firms.
  23. 75% self-employed customers, 71% first-time mortgage borrowers.
  24. 99% women co-borrowers, 72% EWS + LIG customers.
  25. Home Loans
  26. Loan Against Property (LAP)
  27. Assets Under Management (AUM) of ₹8,189 Crs (35% YoY growth).
  28. Disbursement of ₹3,355 Crs (27% YoY growth).
  29. 109,277 active customers.
  30. Average loan ticket size of ₹10 Lacs.
  31. 99% in-house sourcing, 95% digital collections, 80% customers registered on app.
  32. Aim to add 40-45 branches annually over next few years.
  33. Increase borrowing powers up to ₹12,000 Crs.
  34. Approve Employee Stock Option Plan 2025 (ESOP 2025).

Risk Factors

  1. Interest rate fluctuations impact affordability.
  2. Economic slowdowns affect business growth.
  3. Regulatory changes impact lending operations.
  4. Cybersecurity threats pose financial and reputational risks.

Key Drivers

  1. Strong AUM and disbursement growth.
  2. Consistent credit rating upgrades.
  3. Strategic branch network expansion.
  4. Technology-driven operational efficiency.

Auditor’s Report

  1. Unmodified opinion on standalone and consolidated financial statements.
  2. Impairment of Financial assets (Ind AS 109).
  3. Estimation of probability weighted loss on financial instruments.
  4. Grouping borrowers, staging loans, determining macro-economic factors.
  5. Management overlay based on risk assessment and qualitative adjustments.

Board Commentary

  1. Re-appointment of Mr. Sudhin Bhagwandas Choksey as Chairman.
  2. Re-appointment of Mr. Rupinder Singh as MD & CEO.
  3. Approval of increased remuneration for MD & CEO for FY 2025-26.
  4. Resignation of Mr. Shailesh J Mehta as Non-Executive Director.
  5. Recommended final dividend of ₹5.00 per equity share.
  6. Equivalent to 100% of face value for FY 2024-25.
  7. Dividend payout ratio for FY 2024-25 is 14.24%.
  8. Dividend income taxable, subject to applicable tax deduction.
  9. Company has not defaulted on bank/FI dues.
  10. No orders impacting going concern status.
  11. One fraud case reported to National Housing Bank.
  12. Penalty of ₹68,000/- from stock exchanges for non-compliance.
  13. Income tax notices for assessment years 2017-18 and 2019-20.
  14. GST demand orders for FY 2019-20, appeals filed.
  15. One fraud case of ₹16.74 Lacs reported to NHB.
  16. Approved increase in borrowing powers up to ₹12,000 Crs.
  17. Approved Employee Stock Option Plan 2025 (ESOP 2025).
  18. Issued ₹50 Crs Non-Convertible Debentures in 2024-25.
  19. Added 43 new branches in FY 2024-25.

Corporate Governance

  1. Code of Conduct for Prohibition of Insider Trading.
  2. Vigil Mechanism & Whistle Blower Policy implemented.
  3. Human Rights Policy and Equal Opportunity Policy in place.
  4. Prevention of Sexual Harassment Policy implemented.
  5. Board comprises 8 directors, including 4 independent directors.
  6. 2 of 8 directors are women.
  7. Average board tenure is 4.02 years.
  8. 29% women representation on the board.
  9. 13 committees constituted, including Audit, Risk Management, ESG & CSR.
  10. 7 Board Level Committees and 9 Management Level Committees.
  11. Committees ensure compliance with Companies Act and SEBI Regulations.
  12. Penalty for non-compliance with Nomination and Remuneration Committee composition.
  13. One fraud case reported to National Housing Bank.

Management Discussion & Analysis

Future Strategy

  1. Expand footprint through branch expansion and deeper market penetration.
  2. Leverage technology to enhance productivity and customer experience.
  3. Build scalable, agile, future-ready organization.
  4. Embed sustainability deeper into strategic core, ESG framework.

Industry Overview

  1. Indian housing finance market on steady growth path.
  2. Sector projected to record 13-15% CAGR (2024-25 to 2029-30).
  3. Affordable housing segment witnessing sustained growth.
  4. NBFC credit expected to grow 15-17% (2024-25 to 2027).

Macroeconomic Outlook

  1. Global economy shows steady growth amid complex environment.
  2. India positioned as promising growth market, 6.8% GDP growth 2024-25.
  3. Per capita income expected to exceed USD 4,000 by 2030.
  4. Rising disposable incomes reshaping consumer aspirations.

Operational Focus Areas

  1. Strengthening decision-making and risk assessment.
  2. Reducing manual intervention, improving efficiency.
  3. Ensuring data protection and regulatory adherence.
  4. Comprehensive market coverage in key states.
  5. Phygital strategy reduces costs, boosts efficiency.

Performance Drivers

  1. Stable operating model, prudent risk management, focused execution.
  2. Sustained demand in affordable housing, internal sourcing, credit practices.
  3. Strategic expansion across 15 states, utilizing branch network.
  4. Technology-driven operational efficiency, customer engagement.
  5. 99% direct loan sourcing fosters trust and long-term engagement.

Risk Control Measures

  1. Robust underwriting, digital onboarding, predictive analytics.
  2. Internal control systems, clear demarcation of duties.
  3. Regular assessment of maturity profile, stress testing.
  4. ECB fully hedged via cross-currency swaps.
  5. Sufficient cash reserves, Asset-Liability Policy ensures liquidity.

Critical Risks

  1. Interest rate fluctuations impact affordability.
  2. Economic slowdowns affect business growth.
  3. Regulatory changes impact lending operations.
  4. Cybersecurity threats pose financial and reputational risks.