Shriram Housing Finance - Annual Report 2020-21

Progressing
with Purpose

As we make further progress in our journey towards building the SHFL 2.0, we commit ourselves to become more customer-centric, and a dynamic organisation that is respected for its performance and value-creation approach. We aim to be the gold standard among the Housing Finance companies in India.

We continue to focus on our growth strategy by leveraging our strengths and key business enablers such as our robust collection process, strong credit processing, scalable technology and digital capabilities, which will help us succeed and generate sustainable value for our customers and stakeholders.

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2020-21 Highlights

` 428.3 Crore

Total Revenue
(17.0% y-o-y growth)

` 104.4 Crore

PPOP (Pre-Provisioning Operating Profit)

` 62.4 Crore

Profit after tax
(34.2% y-o-y growth)

23%

Capital Adequacy Ratio

82

Branches

824

Employees

` 576.5 Crore

Net worth
(12.3% y-o-y growth)

` 2.91

Earnings per share
(34.1% y-o-y growth)

32,000+

Customers served
till date

`3,929 Crore

AUM

`2,195 Crore

Disbursement

About Shriram Housing Finance

Our Vision

Housing for All

Implementing the National Vision of ‘Housing for All’ in our ‘Shriram’ way by reaching out to all section of the population with innovative home loan schemes.

Our Mission

Finding Ways to Funding Homes

To serve the under-served population of the country in fulfilling their aspiration of owning a dream home by 'Finding Ways to Funding Homes'.

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Our Key Strengths

Part of the financial services conglomerate with 45+ years of experience

One of the few HFCs in India serving customers across segments and products

Technology-
enabled processes for efficient decisionmaking

Geographically widespread branch network

Strong leadership team driving quality portfolio growth

Healthy loan book with outstanding performance

Granular housing loan focused portfolio

Nov 2010

Commencement of our business

Aug 2011

Registered as HFC under the National Housing Bank

Mar 2013

AUM
` 100 Crore

July 2013

First round of equity infusion, completed by SCUF & Valiant
(` 200 Crore)

Aug 2014

Raised first bank loan at credit rating
CARE AA+

Oct 2014

AUM
` 500 Crore

Sep 2015

AUM
` 1,000 Crore

Nov 2018

New leadership team to take the business to new heights

Apr 2019

Rated AA by CRISIL

Dec 2019

AUM
` 2,000 Crore

Oct 2020

New Brand Identity

Nov 2020

AUM
` 3,000 Crore

Mar 2021

Recognised as
ET Best BFSI
Brands 2021

Mar 2021

AUM
` 3,929 Crore

Net worth
` 576.5 Crore

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RAVI SUBRAMANIAN

Managing Director & CEO

Message from the Managing Director & CEO

We have had a great FY21, and with the capital infusion of `200 Crore by Shriram City Union Finance Limited at our disposal, we expect to ride out the second wave of the pandemic and emerge stronger in FY22.

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Message from the Managing Director & CEO

We have had a great FY21, and with the capital infusion of `200 Crore by Shriram City Union Finance Limited at our disposal, we expect to ride out the second wave of the pandemic and emerge stronger in FY22.

RAVI SUBRAMANIAN

Managing Director & CEO

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Message from the CFO

Our AUM grew 70.4% YoY to `3,929 crore. Disbursements were higher at 94.7% YoY. Our strong loan books and robust collection framework and practices ensured a GNPA decline by 50 bps YoY and 21.0% drop in NPA provisioning, despite a challenging economic scenario.

GAURI SHANKAR
AGARWAL

Chief Financial Officer

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Business Review

Our growth was supplemented by strong credit and collections infrastructure that ensured continuous decline in NPAs, despite macro-economic challenges. The Company had highest ever annual disbursals and AUM since inception and also achieved it with lowest ever Stage 3 Assets.

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Home Loan

Offerings include

Purchase of Home/Flat
Self-Construction of Home
Affordable Homes (PMAY)
Home Improvement/Extension Loans
Balance Transfer of Home Loans

67.86%

Portfolio Mix

Loan Against Property

Offerings include

Loan against Residential Property
Loan against Commercial Property

28.35%

Portfolio Mix

Construction Finance

Offerings include

Financing schemes for builders

3.79%

Portfolio Mix

Strategic Priorities

Evolving Product & Geographic Mix

Comprehensive Product Basket Catering to consumer across segments
Geographic presence through 82 customer offices – Started cross-sell through credit proven group customers
Leveraging Group strengths – Customer know-how, technology, location advantage

Strong Customer Orientation

Proven and Bankable name in the target segment
Targeting primarily first-time home buyers, and those staying in joint families
Ability to understand the customer cash flows in unorganised sectors

Technology at Core

AI Integrated Loan Origination System
Scorecard based Credit Decisioning
Digital Lead Management System for improved Turnaround

Focused Risk Management

Independent credit and risk vertical
Risk Intelligence based on consumer analytics
Check point controlled underwriting mechanism

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Business Enablers

Robust Credit Underwriting

Our company focuses on building a superior quality loan book with demonstrated ability to underwrite a diverse set of customers and has a decentralised credit function with multiple checkpoints to achieve controlled growth. Our teams are empowered at the branch level to take ownership for underwriting decisions, leading to faster TAT and high-quality portfolio. We also have a watertight underwriting practice and portfolio monitoring to maintain superior asset quality.

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Disbursal

Portfolio

Robust Collection Process

EMI payment being driven through digital mode

Collections are the wheels supporting SHFL wagon

Extensive focus on digital collections
Differentiated strategy for each bucket with clear roles defined within the team
Dedicated in-house team to ensure seamless collection process through tele-calling along with app-based eminders to make customers aware of the upcoming EMIs, resulting in a clearance rate of ~85%.

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Razor sharp focus on collections with team in place to partner business in the growth journey

Collection Efficiency (%)

*Moratorium in Q1FY21 & Q2FY21

Digital Ecosystem and Strong Internal processes

Strategic tie-ups to complement in-house capabilities at key points in disbursal process

1. Loan application

A. Eligibility check

Two-way video call
Bank Statement Analyser
Bureau Integration
Video PD tool

B. Document collection

Document Mgmt. System

2. Loan processing

3. Loan approval

4. Disbursement

A. Loan management

Making SHFL paperless

B. Cash management

Contactless & cashless collection

C. Customer service

Smart messaging platform

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Progressing with purpose

Progressing with Purpose

2020-21 Highlights

` 428.3 Crore

` 104.4 Crore

` 62.4 Crore

23%

82

824

` 576.5 Crore

` 2.91

32,000+

`3,929 Crore

`2,195 Crore

Our Vision

Housing for All

Our Mission

Finding Ways to Funding Homes

Our Key Strengths

Nov 2010

Aug 2011

Mar 2013

July 2013

Aug 2014

Oct 2014

Sep 2015

Nov 2018

Apr 2019

Dec 2019

Oct 2020

Nov 2020

Mar 2021

Mar 2021

Message from the Managing Director & CEO

We have had a great FY21, and with the capital infusion of `200 Crore by Shriram City Union Finance Limited at our disposal, we expect to ride out the second wave of the pandemic and emerge stronger in FY22.

Message from the CFO

Our AUM grew 70.4% YoY to `3,929 crore. Disbursements were higher at 94.7% YoY. Our strong loan books and robust collection framework and practices ensured a GNPA decline by 50 bps YoY and 21.0% drop in NPA provisioning, despite a challenging economic scenario.

Message from the Managing Director & CEO

We have had a great FY21, and with the capital infusion of `200 Crore by Shriram City Union Finance Limited at our disposal, we expect to ride out the second wave of the pandemic and emerge stronger in FY22.

Message from the CFO

Our AUM grew 70.4% YoY to `3,929 crore. Disbursements were higher at 94.7% YoY. Our strong loan books and robust collection framework and practices ensured a GNPA decline by 50 bps YoY and 21.0% drop in NPA provisioning, despite a challenging economic scenario.

Key Performance Indicators

Asset Under Management Growth (` Crore)

Total Disbursements & Growth (` Crore)

PAT (` Crore)

Portfolio Mix (%)

Net Worth (` Crore)

Total Revenue (` Crore)

Yield on Assets (%)

NIM (%)

Profit per employee (` Lakh)

Cost to income ratio (%)

Gross and Net Stage 3 Assets (NPA) (%)

ROA (%)

ROE (%)

Business Review

Home Loan

67.86%

Loan Against Property

28.35%

Construction Finance

3.79%

Strategic Priorities

Evolving Product & Geographic Mix

Strong Customer Orientation

Technology at Core

Focused Risk Management

Business Enablers

Collection Efficiency (%)

People at SHFL

Awards and Events

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Management Discussion and Analysis

Directors' Report

Financial Statments

Corporate Information

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MDA

Directors' Report

Financial Statments

Progressing
with Purpose

Message from the
CFO

Directors'
Report