Indiabulls Housing Finance Limited is a non-deposit taking housing finance company ('HFC') registered with the NHB. They are also a notified financial institution under the SARFAESI Act. They pre-dominantly offer housing loans and loans against property to the varied client base which comprises (i) salaried and employees; (ii) self-employed individuals; (iii) micro, small and medium-sized enterprises ('MSMEs'); and (iv) corporates. They focus primarily on long-term secured mortgage-backed loans. They also offer mortgage loans to real estate developers in India in the form of lease rental discounting for commercial premises and construction finance for the construction of residential premises. A majority of the Loan Book comprises housing loans, including in the affordable housing segment. As of March 31, 2023, housing loans and non-housing loans, on standalone basis, constituted 57% and 43%, respectively, of the Loan Book. As on December 31, 2023, the Loan Book was Rs 46,034.59 crores, on a standalone basis, and as on December 31, 2023, the Loan Book was Rs 55,917.07 crores, on a consolidated basis. As of December 31, 2023, they have a network of 217 branches spread across India which gives us a pan-India presence. The presence across India allows to undertake loan processing, appraisal, and management of customer relationships in an efficient and cost-effective manner. As of December 31, 2023, they have a direct sales team of 1,589 employees, on a consolidated basis, who are located across the network. This sales team is instrumental in sourcing the majority of the customers. They also rely on external channels, such as direct sales agents for referring potential customers to. In addition, they have an online home loans fulfilment platform called e-Home Loans which allows the customers to apply for a home loan and upload the requisite documents online. As at December 31, 2023, the consolidated borrowings (other than debt securities) were Rs 28,306.61 crores, consolidated debt securities were Rs 15,807.34 crores and consolidated subordinated liabilities were Rs 4,184.01 crores and the standalone borrowings (other than debt securities) were Rs 24,520.17 crores, standalone debt securities were Rs 14,922.70 crores and standalone subordinated liabilities were Rs 3,852.88 crores. They rely on longterm and medium-term borrowings from banks and other financial institutions, including external commercial borrowings and issuances of non-convertible debentures. They have a diversified lender base, comprising public sector undertakings (“PSUs”), private banks and other financial institutions. They also sell down parts of the portfolio through the securitisation and/or direct assignment of loan receivables to various banks and other financial institutions, which is a major source of liquidity for them. As at December 31, 2023, March 31, 2023, 2022 and 2021, the consolidated gross NPAs as a percentage of the consolidated Loan Book were 3.30%, 3.37%, 3.76% and 3.16%, respectively, and the consolidated net NPAs (which reflect the gross NPAs less provisions for ECL on NPAs (Stage 3) for the nine months ended December 31, 2023 and years ended March 31, 2023, 2022 and 2021, as a percentage of the consolidated Loan Book, were 1.98%, 2.24%, 2.21% and 1.90%, respectively. As of December 31, 2023, they have ECL allowance on financial assets and loan commitments amounting to Rs 1,238.37 crores on a consolidated basis which is equivalent to 2.21% of the consolidated Loan Book and 67.14% of the consolidated Gross NPAs. The ECL allowance also includes provision for increased risk of deterioration of the loan portfolio on account of macroeconomic factors caused by the COVID-19 pandemic. As of March 31, 2023, 2022 and 2021, the standalone CRAR (%) was 23.01%, 22.49% and 22.84%, respectively. The standalone CRAR (%) is computed in accordance with the RBI Master Directions for Fiscal 2023, 2022 and 2021. The regulatory minimum requirement for CRAR (%) was 15% for March 31, 2023, 15% for March 31, 2022 and 14% for March 31, 2021. For the nine months ended December 31, 2023, and the Fiscal Years 2023, 2022 and 2021, the consolidated total revenue from operations was Rs 6,270.26 crores, Rs 8,719.28 crores, Rs 8,983.31 crores and Rs 9,927.42 crores, respectively. For the nine months ended December 31, 2023, the consolidated profit for the period attributable to the Shareholders of the Company was Rs 894.96 crores. For the Fiscal Years ended 2023, 2022 and 2021 the consolidated profit for the year attributable to the Shareholders of the Company was Rs 1,129.69 crores, Rs 1,177.74 crores and Rs 1,201.59 crores, respectively. Further, for the nine months ended December 31, 2023, and the Fiscal Years 2023, 2022 and 2021, the standalone total revenue from operations was Rs 5,400.67 crores, Rs 7,363.76 crores, Rs 7,765.39 crores and Rs 8,654.64 crores, respectively. Also, for the nine months ended December 31, 2023, the standalone profit for the period was Rs 714.32 crores, and for the Fiscal Years ended 2023, 2022 and 2021, the standalone profit for the year was Rs 819.17 crores, Rs 696.11 crores and Rs 1,058.46 crores, respectively. This NCD is given 'CRISIL AA/Stable' by CRISIL Ratings Limited, 'ICRA AA/Stable' by ICRA Limited and Research Private Limited and the instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Financials of company are average. So, rating is good, coupon rates are high and net profit is in declining. So, we give SUBSCRIBE rating to debt issue.
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