India Shelter Finance Corporation Ltd (ISFCL) is planning to open 42 branches in FY25 to keep up the momentum in AUM (assets under management) growth.

These additions will take the affordable housing finance company’s pan-Indian branch network to 264 by March-end 2025.

Rupinder Singh, MD & CEO, observed that ISFCL identifies locations in Tier-2 and Tier-3 cities in every State, expecting business to come from these areas.

“Today we are at 215 (branches spread across 15 States). We will end up around 222 or 223 branches (by March-end 2024),” he told analysts in a recent interaction.

Singh underscored that ISFCL, which commenced its operations in Rajasthan in FY11, will continue to deepen its branch network in the 15 States where it is already present.

“So, we don’t have any plans to expand into any new State as of now but continue to diversify in these 15 States systematically,” he said. Eighty-seven per cent of the Gurugram (Haryana)-headquartered company’s branch network is in seven States — Rajasthan, Maharashtra, Madhya Pradesh, Karnataka, Gujarat, Uttar Pradesh, and Tamil Nadu.

The ISFCL chief noted that as branch vintage increases, productivity starts improving, providing the company with the opportunity to leverage operating efficiencies.

Affordable housing: Lot of scope

ISFCL’s AUM rose 42 per cent year-on-year to ₹5,609 crore as of December-end 2023, compared to ₹3,954 crore as of December-end 2022. 

As on December-end 2023, home loans and loans against property accounted for 58 per cent (56 per cent as at December-end 2022) and 42 per cent (44 per cent), respectively, of the company’s loan portfolio. The average ticket size of both these loan categories is ₹10 lakh.

“In terms of growth, I think affordable housing is something which has a lot of scope. The industry is evolving. The reach is building up.…I feel the scope is enormous…even at a decent base…you can see 30-35 per cent growth coming around,” Singh said.

The ISFCL chief emphasised that the company has consciously adopted in-house sourcing model, whereby 98 per cent of its (customer) sourcing is in-house, starting from lead generation, to credit, to legal, to technical, operations, and collections.

“If you see the kind of customers which we are sourcing (the average ticket size is ₹10 lakh)…most of them are self-employed, ensuring their rozi roti (work to earn a livelihood) through that. So they have an income range (monthly) anywhere starting from ₹25,000 to ₹60,000, have a family, aspire to build a house or want to expand business,” Singh said.

The company reported a 55 per cent year-on-year increase in third-quarter net profit, reaching ₹62 crore compared to ₹40 crore in the same quarter the previous year.

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