SRG Housing Finance Ltd

MANAGING DIRECTOR'S MESSAGE

Notably, even in such challenging times, we delivered strong growth compared to the previous year; and we stand resilient and prepared for the unfolding circumstances

Dear Shareholders,

Trust you all are safe and in good health.

The COVID-19 pandemic has tested the resilience and adaptability of a wide range of businesses and sectors. We are operating in an unprecedented situation with recurring waves of the pandemic impacting lives around us. The overall business environment remained muted during the year with demand slackening in almost all sectors.

At SRG Housing, we responded proactively to the situation and ensured business continuity with our technology platforms and customer-centric approach. Notably, even in such challenging times, we delivered strong growth compared to the previous year; and we stand resilient and prepared for the unfolding circumstances. Our extraordinary teams worked tirelessly to deliver value to our clients and communities.

Our agility and resilience turned the COVID-19 adversity into an opportunity. As migrant laborers began shifting to their hometowns, we satiated their needs for housing security, particularly in rural and semi-urban areas, to help them avoid residential vulnerability, practice social distancing, and stay at home to fight the virus and bring about a meaningful change in their lives. As consumption in these cities increases, it will also improve liquidity in the system and increase consumption demand. Our measures are aimed at providing housing security and improving the livelihoods of these migrant laborers.

performance for 2020-21

We have an unwavering goal of providing easy home loans in semi-urban and rural regions. During the year, our Assets Under Management (AUM) stood at Rs. 325.40 crore from '274.24 crore in the previous year, while disbursement stood at '89.88 crore, compared to '48.48 crore in the previous year.

Net Interest Income for the year was '36.17 crore as against '35.09 crore in 2019-20. Profit after Tax grew to '18.83 crore from '17.97 crore in the previous year. Our NPAs continue to be low at 0.42%, with an average Loan to Value (LTV) ratio of 41.48%.

strategic priorities and business advancements

Over the years, we have steadily evolved as an organization, never losing sight of our motto and the objective of turning the dream of home ownership into a reality for the unserved and underserved masses. Having said that, what started as a means to fulfill dreams is today one of the key growth areas in the industry. Rural housing and credit requirement are seen as thriving opportunities. The housing sector

is now poised for growth. Despite the expansive efforts, the mortgage penetration level in India is quite low, offering several opportunities to scale up our business. Our objective is to cater to the rising demand for housing finance. The housing finance industry's buoyancy is further endorsed by growth drivers such as rising disposable incomes, personal income tax benefits, increasing urbanization, and growth of the rural economy. We are well positioned to support government schemes like Housing for All and Pradhan Mantri Awas Yojana (PMAY) to cater to the housing needs of millions of Indians.

Our capability and competence in this segment provide us a distinct edge. Today, we have 34 branches across rural and semi-urban areas across the country. Our network is well supported by an outstanding team of people who have sound market knowledge and enjoy strong relations with customers. We have also achieved digitalization of our processes efficiently, further reducing the turnaround time of loan processing and final disbursement. Our processes are scalable and increasingly oriented towards automation. During the year, we continued our focus on innovating and creating newer and simpler ways to improve efficiencies and processing, reduce the turnaround time, and streamline collection and disbursement channels. With implementation of SRG SRAJAN, our key objective is to eliminate redundancies and enhance efficiencies and productivity of our resources.

During the year, we onboarded Mr. Arun Mishra, and Mr. Saurabh Rajawat, to our management team. These individuals come with dynamic experience and expertise and have been appointed in key roles across various industries prior to joining our Company. I am quite confident that these new members will further strengthen our leadership team and fructify our expansion plans.

Along with this, we are also focused on enhancing our presence by opening branches in the neighborhood, and with a larger and experienced team of resources. Our extensive presence enables us to add value and to improve the quality of lives of our customers. Further, we are adequately capitalized as our asset quality and liquidity position remains strong. We have raised funds amounting to Rs. 150 crore, including Rs. 40 crore undrawn to support our expansion plans during the year. Of this Rs. 150 crore raised, Rs. 125 crore were under various schemes of National Housing Bank and under TLTRO scheme of RBI.

business outlook

Notwithstanding the near-term challenges, we remain steadfast in our efforts towards becoming an even bigger player in India's housing finance sector. The unprecedented disruptions in the current times have emphasized that our agility and customer-centricity are necessary attributes to navigate through the adversities. Most importantly, two decades of rich experience and expertise in the rural segment gives us a competitive edge in the industry.

We are now moving ahead with a clear direction to achieve sustained, high growth with our consistent efforts. We continue to serve our customers with passion and commitment and invest in advanced technologies to drive efficiencies and enhance customer experience. In addition, we plan to open new branches in regions with high potential and enhance our geographic reach across the country. With immense opportunities coming underway, we are focused on capitalizing our competencies to drive growth and meet the home ownership dreams of people of all income groups.

I am delighted to state that even amidst the difficult circumstances, we added two new lenders, which shows their trust in our business model. The National Housing Bank has refinanced us Rs. 65 crore in 2020-21, which shows regulatory confidence in our compliance and systems. Strong asset quality despite the pandemic boosts our confidence in our underwriting model. Moreover, our consistent investments in technology and IT systems under SRG SRAJAN, helped ensuring smooth business functioning even during the lockdown.

conclusion

I would like to take this opportunity to thank our stakeholders for their invaluable guidance and constant trust. Above all, I would like to thank our enthusiastic teams who have worked tirelessly to ensure uninterrupted business operations in these challenging times.