India Shelter Finance Corporation Ltd

Looking back at the past year, I take immense pride in sharing our progress and achievements that have marked our journey towards responsible growth. India remains a land of boundless opportunities, where rising aspirations for homeownership and increasing financial inclusion are shaping the affordable housing finance sector. As a company committed to making homeownership accessible to underserved communities, we have reinforced our foundation by fostering trust, driving efficiency, and creating meaningful impact.

India is firmly positioned as one of the world's most promising growth markets. With projected GDP growth of 6.8% in 2024-25 and private consumption doubling to USD 2.1 Tn in 2024 since 2013, the country continues to demonstrate strong and sustained domestic demand. By 2030, per capita income in India is expected to exceed USD 4,000, while the number of individuals earning over USD 10,000 annually could triple to 165 Mn, marking a significant expansion of the middle class. Despite this progress, India's mortgage-to-GDP ratio stood at just 12.3% in 202223, significantly lower than global benchmarks where ratios range from 20% in emerging economies to as high as 65% in developed markets. This wide gap highlights the significant untapped opportunity for institutions to deepen credit access and accelerate the country's journey towards broader financial empowerment.

The ratio is projected to rise driven by improving access to credit, greater financial inclusion, and targeted policy support. As the nation advances, structural reforms, digital advancements, and a thriving entrepreneurial ecosystem are unlocking fresh opportunities across sectors. With rising credit penetration and expanding mortgage adoption, the financial services sector is primed for substantial growth, creating a dynamic environment for opportunity.

Demand for affordable housing finance continues to accelerate across Tier II, Tier III, and fast-growing micro-markets. Rising disposable incomes, driven by expanding job opportunities in sectors like IT, service, manufacturing, and e-commerce, are reshaping consumer aspirations in these regions. At the same time, government initiatives such as PMAY and infrastructure push through Smart Cities, Bharatmala, and UDAN are enhancing livability. In line with this focus, the Union Budget 202526 allocated Rs.19,794 Crs towards the Pradhan Mantri Awas Yojana (PMAY). As of March 2025, a cumulative target of 3.79 Crs houses has been allotted under PMAY, with 2.72 Crs already completed, demonstrating progress towards inclusive housing development.

Building on this momentum, with deep market penetration, a sturdy branch-led distribution model, and a digital-first engagement approach, we are closing credit gaps and enabling families to realise their homeownership dreams. This integrated approach allows us to effectively bridge credit gaps for LIG and MIG customers, helping families in India's growing cities achieve their dream of owning a home.

We remain committed to resilience and disciplined execution, ensuring strong financial and operational performance. This year, our Assets Under Management (AUM) expanded by 35% YoY to ' 8,189 Crs, fuelled by a disbursements reaching ' 3,355 Crs, indicating our deepening market position and customer-first approach. We continue to maintain our focus on profitability, with PAT reaching ' 378 Crs. Amid evolving macroeconomic conditions, we are strategically positioned with strong liquidity, backed by recent equity raises and an upgrade in our ratings.

Strengthening our presence in existing markets remains a priority. We aim to deepen penetration by expanding across 15 states and utilising our branch network. During the year, we added 43 new branches, with a vision to add around 40 to 45 branches annually over the next few years, to ensure consistent and scalable growth. By doing so, we aim to enhance accessibility, optimise branch efficiency, and cater to the growing demand for affordable housing finance. This ensures we maximise customer reach, drive operational efficiency, and strengthen our presence in key geographies, while maintaining strong asset quality.

Technology is one of the key driving forces behind our operational efficiency and customer engagement. We have made significant strides in digital transformation, integrating robust credit assessment, automation, and data-driven intelligence to streamline loan origination, underwriting, and risk management. Our current digital ecosystem, which includes five mobile apps and Salesforce, which acts as Loan Origination System and CRM. This has helped us streamline operations and improve customer engagement over the years. We will continue to invest in automation, advanced analytics, and secured digital platforms, all of which are transforming the way we do business. As we expand our data-driven insights and automation, we will continue to focus on refining the customer experience, improving risk frameworks, and driving operational efficiency.

A customer-first mindset is embedded in our business model, shaping every interaction and decision we make. Our employees are more than service providers; they are trusted advisors and brand ambassadors, ensuring every customer receives guidance and support throughout their homeownership journey. With 99% of our loans sourced directly, we have cultivated a relationship- driven approach that fosters trust, transparency, and long-term engagement. Furthermore, our branch-led approach deepens local engagement, particularly in Tier II and III cities, where personalised support and financial literacy are critical to enabling homeownership.

In addition, we continuously invest in customer education, raising awareness and strengthening our brand's credibility. Through localised campaigns, digital engagement, and community-led initiatives, we strive to forge deeper connections with our customers. Moreover, by promoting responsible lending, fostering transparent policies, and engaging proactively, we continue to strengthen relationships and drive long-term financial inclusion.

Effective risk management has been fundamental to our success.

By integrating Credit Assessment, Scorecards, Business Rule Engine, and real-time risk analytics, we continuously refine our underwriting standards. A sharp, data-driven approach helps us sustain a low NPA ratio and a well-diversified portfolio. As we grow, we will refine our risk frameworks even further, improving asset quality and financial endurance.

True growth goes beyond scale. It must be responsible, inclusive, and transformative. This year, we are embedding sustainability deeper into our strategic core by formalising our ESG framework, while aligning with global best practices. Our approach to financial inclusion, workforce diversity, and responsible lending underscores our broader ambition to create a lasting positive impact on society.

As we advance, we will continue integrating ESG principles, ensuring our progress uplifts both our stakeholders and the communities we serve.

With India's growth story gaining momentum, we are strategically positioned to tap into the vast opportunities emerging in the affordable housing finance sector. Backed by the sector's long-term potential and supportive policy environment, we continue to expand our footprint through focussed branch expansion and deeper market penetration. At the same time, we are leveraging technology to enhance productivity, streamline operations, and deliver a more seamless customer experience. Guided by our core growth pillars, we remain committed to building a scalable, agile, and future-ready organisation that meets the evolving needs of aspiring homeowners across India.

I extend my heartfelt gratitude to our Board members, Regulators, Shareholders, Customers, and Employees, for their support and trust in our journey. Together, we will continue to shape the future of housing finance, building lasting value for all.

Warm Regards,