Details of the offering
- Name of the Issuer: Star Housing Finance Ltd
- Product: Senior secured Bonds (regulated by SEBI)
- Yield: 13.50% p.a.
- Tenure: ~35 months
- Min Investment: Rs. 80,000
- Interest repayment: Monthly
- Principal repayment: Monthly
- Rating: CARE "BBB"
Key Highlights of Star Housing Finance:
- The company has long vintage of around 2 decades with strong presence in Maharashtra and Rajasthan
- As of Sep’23, the company had a gross AUM of INR 319 crore and a Net Worth of INR 112 crore; Strong growth in AUM over the last fiscal to INR 319 crore in Sep’23 from INR 246 crore in Mar’23, at a growth rate of 30%.
- Comfortable capitalization levels with low leverage of 1.99x as of Sep’23 supported by an equity raise in FY23
- Portfolio quality is moderate with GNPA and NNPA at 1.46% and 1.08% respectively in Sep’23
- Strong board and an experienced management team having vintage in the lending business
Star Housing Finance – Overview
Star Housing Finance Limited is a BSE listed NHB-registered NBFC that was established in 2005. The company was founded by late Dr. Mohan Lal Nagda with a vision to provide simplified housing finance solutions to EWS, LIG and MIG households. The company is currently being managed by a group of well experienced housing finance professionals under the leadership of Mr. Ashish Jain and Mr. Kavish Jain. The company is currently present in the states of Rajasthan, Madhya Pradesh, Gujarat, Maharashtra and Tamil Nadu.
As of Sep23, company has customer presence in 5 states across 80+ districts; however Maharashtra, Rajasthan and MP are the major states that contribute 64%, 13% and 13% respectively of the portfolio. The company is headquartered in Mumbai. It has an AUM of 319 crore which includes a managed AUM of 30 crore.
Management
Mr. Ashish Jain is the Managing Director of the company. He is part of the second generation of promoters. He is an Engineer by qualification and is a postgraduate from the University of Nottingham, in the UK. Mr Ashish Jain has been involved in the general management of the Group in different capacities and has been actively involved in the housing finance business since 2015. He leads the overall operations of the Company including business, finance, accounts and operations. He has been appointed as Managing Director of the Company in May 2018.
Mr. Kalpesh Dave, CEO, holds an MBA in Finance from Narsee Monjee Institute of Management Studies and has more than a decade of experience in the housing finance sector. In his previous roles he has been associated with Motilal Oswal Home Loans (Aspire Home Finance), Dewan Housing, Morgan Stanley and ARKFIN Investments. He joined Star Housing in 2019. His expertise includes competitive environment scanning, setting and scaling up of business processes, setting up of branch infrastructure, developing practical and result oriented strategies for on-ground implementation.
Mr. Natesh Narayanan, CFO has an experience of fund raising for the past fifteen years. In his previous stints, he has been associated with several institutions like Axis Mutual Fund, ARKFIN Investments, Reliance MF and Reliance Capital Asset Management. He joined Star Housing in 2019.
Mr. Anoop Saxena, COO is a CA
with 15+ years of experience in Credit & Operations Management, Business
Management, Product Development, Portfolio Management, Underwriting and
internal Audit in housing finance space. In his previous stints, he has been associated with organizations like
HDFC Bank, Shubham Housing, Ujjivan Small Finance Bank and Satya Micro capital.
He joined Star Housing in 2021. He is instrumental in setting up the risk framework at Star
HFL along with the policies and processes. He also heads the current Co-lending
vertical and development of rural focused housing loan products.
Key Financials
All figures in INR crore
|
Balance Sheet |
FY 22 |
FY 23 |
9M FY24 |
|
Cash & cash equivalents |
29.18 |
12.96 |
47.53 |
|
Bank balances |
5.2 |
27.87 |
20.20 |
|
Loans Portfolio |
102.7 |
228.23 |
328.60 |
|
Investments |
8.58 |
7.38 |
7.76 |
|
Other financial assets |
6.34 |
4.84 |
10.62 |
|
Fixed Assets |
1.64 |
3.75 |
5.00 |
|
Total Assets |
153.64 |
285.03 |
419.72 |
|
Total Equity |
64.1 |
105.79 |
131.21 |
|
Borrowings |
88.04 |
176.31 |
287.28 |
|
Provisions |
0.38 |
0.15 |
0.33 |
|
Other Liabilities |
1.12 |
2.78 |
0.18 |
|
Total Liabilities & Equity |
153.64 |
285.03 |
419.72 |
|
P&L Statement |
FY 22 |
FY 23 |
9m FY24 |
|
Interest Income |
17.63 |
31.41 |
38.74 |
|
Total Income |
19.04 |
35.77 |
42.29 |
|
Finance cost |
6.17 |
11.29 |
19.65 |
|
Impairment on Financial instruments |
0.18 |
-0.84 |
1.3 |
|
Operating Expenditure |
9.61 |
17.31 |
13.98 |
|
Profit Before Tax |
3.08 |
8.01 |
7.35 |
|
Tax Expense |
0.7 |
1.04 |
1.03 |
|
PAT |
2.38 |
6.97 |
6.14 |
The company’s major focus is on semi – urban geographies - tier 2 and tier 3 cities. The products offered by the company include housing loans, Loans Against Property and renovation/ extension loans. The company largely focuses on retail home loans, targeting first-time home buyers from the mid-income group / low-income group (MIG / LIG) borrower segment looking to purchase/construct own homes that qualify under the Pradhan Mantri Awas Yojana (PMAY) scheme.
Even during Covid-19, the company was able to manage its portfolio quality with a PAR90 in the range of 2-3.5% and a steady profitability in both FY21 and FY22.
Lenders
The prominent lenders in Star Housing Finance are:
· Banks/ Government Institutions
o National Housing Bank
o SBI
o Indian Overseas Bank
o ICICI Bank
o Union Bank of India
o LIC Housing Finance
· NBFCs and FIs
o Northern Arc Capital
o Hinduja Housing Finance
o Oikocredit
o MAS Financial Services
o Sundaram Home Finance
o Hinduja Leyland Finance
Disclaimer:
The content of this blog should not be considered as financial or investment
advice. Readers/Viewers may consult their financial advisor before any
investment.