Mumbai: Star Housing Finance Limited (Star HFL) (BSE Scrip code BOM: 539017), a rural-focused home finance company, has recorded robust performance for the year ending Mar 31, 2023.
The Board of Directors have today approved the full-year audited financial results. FY’2022-23 has been the first operational year wherein Star HFL has registered 100%+ y-o-y growth. The scale-up under a strong underwriting and risk framework has resulted in a build-up of quality retail low-ticket home loan books.
Key Operational & Financial Highlights:
Gross Loan Book: The gross loan book as of Mar 31, 2023, has increased y-o-y by 136.33%, inching towards the Rs 250 crs mark during FY 2022-23.
Build up of Quality AUM: Focused in-house receivable management program with strong customer engagement through the loan life cycle has resulted in PAR (0+ dpd) getting reduced from 27.2% as of Mar 31, 2022, to now 5.06% as on Mar 31, 2023. Incremental book since Oct 2019 is 98%+ retail (average ticket size of 12-13 lakhs) having PAR of 0.68% and zero NPA
As of Mar 31, 2023, GNPA stands at 1.68%, and NNPA stands at 1.25%
Geographically Diversified Scale Up: The AUM is built across the states of Maharashtra (Extended Mumbai Region: 25%, Extended Pune Region: 26%, Vidarbha Region: 11%), Madhya Pradesh (10%), Gujarat (5%), Rajasthan (18%) and Tamil Nadu (5%)
During the year, Star HFL has doubled its physical presence to now 14 branches. Coupled with digital PoPs, the Company is now present at 30+ locations across operational geographies with a staff count of 150+ employees, more than 40% of which are in underwriting and collection functions at branches
Net Worth crosses Rs.100 crs: Star HFL has successfully raised capital in two rounds in FY’2022-23 which saw participation from reputed professionals from capital markets and BFSI space. The shareholding profile is augmented with participation from individual investors, institutional entities, a family office and an FPI. Star HFL now has an eco-system of more than 6500 shareholders. Courtesy of these rounds, the net worth has crossed Rs.100 crs and stands at Rs.106.42 crs as of Mar 31, 2023.
Strong Liability Machinery: Star HFL has relationships with public sector banks, private sector banks, financial institutions and the National Housing Bank. During the year, the Company has raised fresh term loans from 11 banks and FIs with a current outstanding of Rs.111.6 crs. FY 2022-23 saw the first term loan received from a social impact fund. Total borrowings outstanding as of March 31, 2023, is Rs.162.5 crs. Through the year, Star HFL has developed a robust pipeline and shall continue to expand its engagement with other institutions in the banking space
Top Line Growth: For the 12 months period ending March 31, 2023, the total income increased by 92.32% y-o-y
Expenses: Investment in quality manpower as required per the growth plan and related expansion in operational geographies has resulted in employee expenses increasing by 27.55% y-o-y. Total operating expenses have increased by 51% y-o-y, primarily attributable to capacity creation for the future build-up and the scale-up that happened in FY’2022-23.
Bottom line growth: For the 12 months period ending March 31, 2023, PBT increased by 507% y-o-y. Removing the exceptional non-cash expense line, PBT has increased by 328% y-o-y. For the 12 months period ending March 31, 2023, PAT increased by 1021% y-o-y. Removing the exceptional non-cash expense line, PAT has increased by 467% y-o-y
Employee Ownership Enabled: FY’2022-23 saw the exercise of the first tranche of the ESOP I scheme ensuring the participation of eligible employees as owners of the Company. Subject to all approvals and compliances in place, Star HFL looks forward to expanding the ambit of employee ownership through further ESOP schemes through the growth journey
Strong and Reputed Board: Star HFL is governed by a strong and independent board comprising reputed professionals from the BFSI space, viz. Amlendra Prasad Saxena (Ex GM, NHB); Ajith Lakshmanan (Ex ED of LIC of India), Pradip Kumar Das (ex-ED IDBI Bank) and Neelam Tater (Professional CA & CS)
Outlook Upgraded: Taking note of the Company’s growth, quality of the loan book, established processes and risk framework, the profile of the management team and overall corporate governance, CARE ratings have upgraded the outlook of the company to “Positive” in the fourth quarter of FY’2022-23
Financial Highlights – Key Financial and Operating Numbers / Ratios:
| Operating & Financial Performance (In Lakhs) | FY2022-23 | FY2021-22 | Y-o-Y Change |
| Disbursements | 18679.81 | 3657.94 | 410.66% |
| AUM (On Book + Off Book) | 24599.06 | 10408.92 | 136.33% |
| GNPA (%) | 1.68% | 2.15% | -0.47% |
| NNPA (%) | 1.25% | 1.65% | -0.40% |
| Interest Income | 3,234.89 | 1,797.37 | 79.98% |
| Total Income | 3724.31 | 1936.54 | 92.32% |
| PBT | 801.63 | 131.91 | 507.71% |
| PAT | 697.99 | 62.22 | 1021.76% |
| Borrowing O/s | 16249.99 | 7847.79 | 107.06% |
| Net Worth | 10641.88 | 6409.85 | 66.02% |
| Leverage(x) | 1.53 | 1.22 | |
| NIM (%) | 11.90% | 11.35% | 0.55% |
| ROE (%) | 8.19% | 1.06% | 7.13% |
| ROA (%) | 3.18% | 0.51% | 2.67% |
| BVPS (Rs.) | 13.79 | 9.66 | 4.13 |
| EPS(Rs.)(Annualized) | 0.929 | 0.372 | 149.73% |
* adjusted post bonus and split
Speaking on the full-year performance, Ashish Jain, MD of Star HFL, said, “The leadership team had resolved at the beginning of the financial year that FY’2022-23 shall be the beginning of the growth journey for Star HFL, and we are happy to have walked the talk registering 100%+ y-o-y growth across key business areas, notably record disbursements during the year and resultant AUM growth. This growth is backed by robust processes and guidelines across operational areas and is governed by strong review mechanisms at the level of senior management and the Board.
Through the liability program and capital raise, we have been able to mobilize funds to fuel the growth. Strong connections and follow-up with customers have rationale PAR to lower single digits, and this has provided us further confidence to grow our book.
One feels that rural India’s story in housing, courtesy rise in income levels, nuclearization, and physical/digital infrastructure development, is set to unfold in the coming years. Local-level drivers in these geographies for growth in residential mortgages shall aid the growth of rural-focused housing companies like Star HFL. We as a team look forward to the exciting next few years for quality growth and creating value for all stakeholders.”