CARE Ratings stated that the reaffirmation of long-term rating to the long-term bank facilities of India Shelter Finance Corporation (ISFCL) factors in the healthy growth in its scale, comfortable capitalisation with gearing of 1.8x as on 31 March 2025, healthy profitability and diversified resource profile.

ISFCL’s AUM has grown to Rs 8,535 crore as on 31 March 2025, registering a growth of 37% year-on-year (YoY). Supported by timely capital raise and debt funding, its growth has remained healthy with a 5-year compound average growth rate (CAGR) of ~41% from March 2020 to March 2025.

Further, the company reported a net profit of Rs. 377 crore in FY2025, translating into return on average total assets (RoTA) of 5.6% and return on average tangible net worth (RoNW) of 15.1%, as compared to Rs.247 crore, 4.9% and 14.0%, respectively, in FY2024.

Further, ISFCL’s asset quality metrics remain comfortable as it reported gross stress (gross nonperforming assets (GNPA) + repossessed assets) of 1.1% as on 31 March 2025 as against 1.2% in March 2024. Its GNPA stood at 1.0% with a provision coverage ratio (PCR) of approximately 25%.

While Care Ratings Limited (CareEdge Ratings) expects some gradual uptick in its NPA as the book seasons, its asset quality metrics is expected to remain adequate in the near term and hence, keep its credit cost contained.

However, ratings are constrained by the relatively low portfolio seasoning, with majority of the portfolio being generated over the recent years and the relatively high, albeit declining, geographical concentration.

Operating in affordable housing finance segment, ISFCL caters to relatively vulnerable borrower profile making the company susceptible to inherent asset quality risks.

However, owing to granularity of the loan book with low loan-to-value ratio (LTV; average LTV of 52%) and established risk management and control systems, ISFCL has been able to keep its asset quality under control so far.

India Shelter Finance Corporation is a housing finance company. It extends loans to urban households, who are a mix of self-employed and salaried workers, living in the periphery of urban and suburban areas of Tier-II and Tier-III cities. It offers products such as home construction, extension, improvement, purchase, and LAP.

The scrip advanced 0.23% to currently trade at Rs 875.10 on the BSE.