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India Bulls Housing Finance is a well-established player in the housing finance sector. It was founded in 2006 and is headquartered in Mumbai.
The company has a strong presence in the Indian market, with a focus on affordable housing. India Bulls Housing Finance offers a range of home loan products to cater to different customer segments.
In terms of growth prospects, the housing finance sector in India is expected to continue its upward trajectory. The government's initiatives to boost affordable housing and the growing demand for housing loans are likely to drive the growth of India Bulls Housing Finance.
Operational Highlights
The operational highlights of Indiabulls Housing Finance are a mixed bag, but let's dive into the key points.
The company's revenues from operations fell by 27% year-over-year to ₹2,534 cr, largely due to a 20% decline in interest income.
Disbursements of loans during Q1FY20 were a staggering ₹72,791 cr, but interestingly, they were flat compared to Q1 FY21.
As of now, the company's loan book is starting to grow, as per their business plan, which involves a balance sheet growth and sell-down to, and co-lending with banks.
The book spread, which measures the difference between the average yield on new loans and the average cost of funds, came in at 2.5% in Q2 FY21, down from 3% in Q2 FY20.
The management expects this spread to move towards 2.7% and stabilize from there onwards as the business model shifts towards retail.
Asset quality improved during the quarter, with Gross Non-Performing Assets (GNPA) coming in lower at 1.98% compared to 2.20% in Q2 FY20.
The Provision Coverage Ratio was also lower at 97.8% compared to 98.53% in Q1FY20.
The company's profits after tax (PAT) de-grew significantly by 54% year-over-year from Sep 2019 to Sep 2020, largely due to lower interest income during the quarter.
Here's a quick summary of the key operational highlights:
Business Model
India Bulls Housing Finance has a unique business model that sets it apart from other financial institutions. The company has entered into co-origination arrangements with few public sector banks.
Co-origination allows the company to originate loans under a jointly drawn up credit policy, with IBH servicing the loan account through the life of the loan. This model is framed by the Ministry of Finance to ensure sufficient liquidity in the system and address credit growth rate during liquidity crises.
80% of the loan is on the bank's balance sheet and the remaining 20% on IBH's. The risk is shared between the NBFC and Bank, which should be in 20:80 as per RBI guidelines.
The company charges different rates linked to their respective benchmarks on their respective portion of the loan. This allows IBH to offer home loans at competitive rates, such as 8% in some markets and up to 10% in tier II and tier III markets.
By leveraging securitization, co-origination, and smart city home loans, IBH aims to achieve a Return on Assets (ROA) of 2.8% and a Return on Equity (ROE) of over 20%.
Financial Summary
Indiabulls Housing Finance has been reporting subdued quarters due to changing business models and decreased housing loan demand.
The company has been downtrading its wholesale loan book to focus on retail lending, which has impacted loan spreads.
This strategy is expected to grow the loan book through co-origination with banks for retail loans and funds for developer loans.
The company plans to grow its balance sheet by 7-8% in FY21E.
A significant growth in Assets Under Management (AUM) is expected in H2FY21.
Company Overview
Indiabulls Housing Finance has a long and complex history that spans over two decades. It was started in 2000 by Sameer Gehlaut, an IIT Delhi graduate, as a stockbroking firm.
The company has undergone significant changes over the years, with several subsidiaries being set up in various sectors such as consumer finance, housing finance, and real estate.
In 2013, Indiabulls Financial Services reverse merged with its wholly-owned subsidiary, Indiabulls Housing Finance, to form the flagship company of the group.
By 2017, Indiabulls Housing Finance had become the second-largest housing finance company in India and was included in the NIFTY 50 benchmark index.
The company has faced significant challenges in recent years, including a sharp decline in its shares and bonds due to a credit market crisis triggered by the collapse of IL&FS.
Sameer Gehlaut stepped down as the chairman of Indiabulls Housing Finance in 2020 and ceased to be its promoter in 2023, marking a significant change in the company's leadership.
In July 2024, Indiabulls Housing Finance was renamed as Sammaan Capital, bringing an end to the company's long history under the Indiabulls brand.
Frequently Asked Questions
What is the new name of Indiabulls Housing Finance?
The new name of Indiabulls Housing Finance is Sammaan Capital Ltd. This change reflects a significant transformation in the company's identity and operations.
Who is the owner of India Bulls Housing Finance?
Sameer Gehlaut is the founder and chairman of the Indiabulls Group, which includes India Bulls Housing Finance. He is an Indian businessman born on 3 March 1974.
What is the price target for ibulhsgfin in 2025?
The initial price target for Indiabulls Housing Finance Ltd in 2025 is ₹189.30, with a potential mid-year target of ₹226.45 under favorable market conditions.
Is Indiabulls now Samman Capital?
Yes, Indiabulls Housing Finance Limited is now known as Sammaan Capital Limited. The company's name change reflects its continued focus on mortgage lending and financial services.
Sources
- https://blog.stockedge.com/indiabulls-housing-finance-powering-home-loans/
- https://investorzone.in/buyback/indiabulls-housing-finance-limited-buyback-offer-2019/
- https://en.wikipedia.org/wiki/Indiabulls
- https://www.thehindubusinessline.com/money-and-banking/indiabulls-housing-finances-name-changed-to-sammaan-capital/article68365705.ece
- https://www.moneycontrol.com/news/tags/indiabulls-housing-finance.html
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