Interview with Star Housing Finance Limited

The company will expand in existing as well as new business geographies and will continue to strengthen its funding machinery, affirms Ashish Jain, Managing Director, Star Housing Finance Ltd.

How is Star Housing Finance Ltd uniquely positioned to capitalize on the tailwinds propelling India’s housing and lending sector?

Over the years, affordable housing has been the major component of the Indian Housing and Finance Sector. Affordable housing finance space in India has been growing at 30%+ CAGR over the last decade. This is fuelled by incremental demand emerging from first time home buyers from EWS and LIG segments. The supply has tried to catch up with the demand resulting in the launch of various low-cost housing projects across tier II and III towns and semi-urban/rural geographies.

Star HFL has been in the business of providing housing finance assistance to first time home buyers who wish to purchase/construct their own homes in the form of low-cost housing units. We have been focusing exclusively on first-time home buyers from the EWS /LIG segment in our operational semi-urban/rural geographies. This ensures Star HFL is in a unique position to capitalise on the expected growth of the housing finance industry as a whole and affordable housing in particular.

What measures are you implementing to further strengthen your debt profile and net worth?

Star HFL on-boarded Natesh Narayanan as the CFO of the company. Post this, the company has added incremental debt funding of Rs 100 crore in the last 18 months with a blended cost of sub 10%. Going forward, the company envisages adding more PSBs, Private Banks and FIs in the next 24 months. The company aims to diversify its liability profile by exploring NCDs, Direct Assignment and Securitisation as more than 90% of its book qualifies under Priority Sector Lending Norms as per RBI guidelines.

What are your key growth levers?

Star HFL is looking for maximum capacity utilisation created in the transformation phase. The company expects to expand in existing as well as new business geographies and will continue to strengthen its funding machinery through debt and equity raising. The company shall invest in technology to develop one-click digital lending solutions aimed at the semi-urban and rural markets. Through existing and future co-lending partnerships, the company expects to complement its on-book AUM growth.

At the moment, what are your top 3 strategic priorities?

Going forward, Star HFL would aim to expand its liability/debt franchise by adding more Public and Private Sector Banks along with Financial Institutions and the NHB. Also, Star HFL will seek to raise growth capital to the tune of Rs 200 crore to satisfy the AUM aspirations for the next 5 years. Complete focus on retail housing loans with an average ticket size of Rs 12 lakh backed by quality in our operational geographies should ensure decent AUM build-up. Subject to all necessary clearance and approvals, the company expects to list/trade on the NSE.