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Indiabulls Housing Finance Ltd.

BSE: 535789 Sector: Financials
BSE 13:05 | 20 Aug 1301.00 32.55






NSE 12:54 | 20 Aug 1287.15 20.25






OPEN 1283.00
VOLUME 30348
52-Week high 1439.40
52-Week low 1080.45
P/E 14.61
Mkt Cap.(Rs cr) 55,514
Buy Price 1300.25
Buy Qty 72.00
Sell Price 1300.95
Sell Qty 163.00
OPEN 1283.00
CLOSE 1268.45
VOLUME 30348
52-Week high 1439.40
52-Week low 1080.45
P/E 14.61
Mkt Cap.(Rs cr) 55,514
Buy Price 1300.25
Buy Qty 72.00
Sell Price 1300.95
Sell Qty 163.00

Indiabulls Housing Finance Ltd. (IBULHSGFIN) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the Twelfth Annual Report together with theaudited statement of accounts of the Company for the financial year ended March 31 2017.

Financial Results

The standalone financial highlights of the Company for the financial year ended March31 2017 are as under -Amount (in Rs. )


Year ended March 31 2017

Year ended March 31 2016
Profit before
Depreciation and amortisation expense


Less: Depreciation and amortisation expense


Profit before Tax


Less: Total Tax expense


Profit for the Year


Add: brought forward balance


Add: Transitional
Adjustment on account of Interest Rate Swaps


Amount available for appropriation


Interim Dividend paid on Equity Shares ( Rs. 27.00 Per Share (Previous Year Rs. 45.00 Per Share))


Corporate Dividend
Tax on:
Interim Dividend paid on Equity Shares


Transferred to Reserve III (Reserve U/s 36(1)


(viii) Considered as eligible transfer to Special Reserve U/s 29C of the National Housing Bank Act 1987) Transferred to Reserve I (Special Reserve U/s 29C of the National Housing Bank Act 1987) 2334765396 1968247713
Transferred to Additional Reserve (U/s 29C of the National Housing Bank Act 1987) 2500000000 -
Transferred to General -
Reserve 1330000000
Transferred to -
Debenture Redemption 1702087881
Balance of Profit
Carried Forward 4721910742 1133086433


FY 16-17 FY 15-16 Growth (%)
Total Revenues 11701.7 9225.6 26.8
( Rs. Cr.)
NII ( Rs. Cr.) 4767.6 3801.8 25.4
PAT ( Rs. Cr.) 2906.4 2344.7 24.0
EPS ( Rs. ) 69 60 15.0


In June 2017 the Company's credit rating was upgraded to the highest long-term ratingof AAA by ICRA the Indian arm of the leading international credit rating agency


The Company now enjoys the highest long-term credit rating of AAA from three ratingagencies.

During FY 2016-17 the subordinate-debt rating of Indiabulls Housing Finance Ltd.(IBHFL) also got upgraded to AAA by CARE Ratings.

Business Update

In FY 2016-17 the Company's balance sheet size crossed the landmark Rs. 100000 Croreto close the year at Rs. 103705 Crore.

The Company continues to be focused on mid-income affordable housing and propelled bythe growth in this segment the Company's total loan assets grew to Rs. 91301 Crore up33% from Rs. 68683 Crore as at the end of

FY 2015-16.

Total sold down loan assets stood at Rs. 8687 Crore at the end of FY 2016-17. Selldown increases the Company's operational flexibility enabling efficient utilization ofcapital besides being RoE accretive.

The Company's cost to income ratio declined to 13.3% for FY 2016-17 from 14.3% theprevious year. Increasing share of home loans through the online eHome Loan platform willfurther hasten the decline in cost to income ratio.

Home Loans: Digitallyenabled Streamlined Loan Fulfillment

In the first half of the year the Company launched a global-first online end-to-endhome loans fulfillment platform called eHome Loans.

By the end of the financial year eHome Loans was already contributing to 20% of homeloan sourcing driving the decline in cost to income ratio.

Key customer facing departments and workflow process are ISO certified ensuringsuperior and standardized customer experience.

ISO 10002:2014 Customer care and complaint resolution
ISO 9001:2015 Loan operations; credit underwriting; administration; human resources
ISO 14001:2015 Environmental management services
ISO 27001:2015 IT infrastructure operations network operations application development and maintenance and data centre

The Company has a well-trained in-house Direct Sales'

Team of over 3000 employees to promptly attend to prospective customers.

A multi-lingual customer care centre accessible by phone chat SMS or email addressescustomer queries and complaints.

Stable Asset Quality

Gross non-performing loans as at March 31 2017 amounted to Rs. 777.2 Cr. This isequivalent to 0.85% of the portfolio.

Net non-performing loans as at March 31 2017 amounted to Rs. 328.6Cr. This isequivalent to 0.36% of the portfolio.

The Company has a prudent approach to creating loan provisions and carries totalprovisions across standard assets provision and sub-standard asset provisions of Rs.1149.1 Cr.

Total provisions over gross NPAs was 148%.

An experienced underwriting team and the in-house sourcing and collection teams ensurecontrol over loan sourcing credit appraisal and portfolio quality.

Strengthening Liability Profile

Total borrowings of the Company grew by 40% to Rs. 85301 Crore at the end of FY2016-17 from Rs. 61085 Crore at the end of FY 2015-16.

In FY 2016-17 the Company tapped the foreign institutional market by issuing USD 200Mn of rupee-denominated masala bonds.

For the first time the Company undertook public issue of bonds raising Rs. 7000 Crorein FY 2016-17.

During the year the Company raised USD 350 Mn through the ECB route.

In keeping with IBHFL's philosophy of maintaining adequate and healthy levels ofliquidity the Company had Rs. 18502 Crore of liquid funds in the form of cash cashequivalent and investment in liquid schemes of mutual funds.

Through the year the Company expanded its lender base and by the end of FY 2016-17 theCompany has 375 strong relationships: 26 PSU banks 20 Private and Foreign banks and 329Mutual Funds Provident Funds Pension Funds Insurance Companies and others.

Bank Borrowings

As at March 31 2017 the Company's outstanding bank loans stood at Rs. 34659 Crorevis--vis Rs. 33571 Crore as at March

31 2016. Bank borrowings' contribution to funding mix continued its downwardtrajectory with only 37% of total funding coming from bank term loans. The Company's bankborrowings continue to enjoy a rating of AAA signifying the highest degree of safetyregarding timely servicing of financial obligations. AAA rated instruments carry lowestcredit risk.

Debentures and Securities

FY 2016-17 saw a continuing shift in the Company's funding sources as bonds continuedto be the cheapest source of funds. Accordingly 87% of the incremental borrowings for theyear were from debentures and securities. As at March 31 2017 the Company's outstandingborrowings from debentures and securities stood at Rs. 48048 Crore vis--vis Rs. 26187Crore as at March 31 2016. The Company's secured NCDs have been listed on the WholesaleDebt Market segment of NSE / BSE and have been assigned AAA (stable) rating from ICRA aMoody's investor Service Company CARE and Brickwork Ratings.

As at March 31 2017 the Company's outstanding subordinated debt and perpetual debtstood at Rs. 1763 Crore and Rs. 100 Crore respectively. The debt is subordinate topresent and future senior indebtedness of the Company and has been assigned the ‘AAA'rating by CARE and Brickworks Ratings. Based on the balance term to maturity as at March31 2017 Rs. 1907.1 Crore of the book value of subordinated and perpetual debt isconsidered as Tier II under the guidelines issued by the Reserve Bank of India (RBI) andNational Housing Bank (NHB) for the purpose of capital adequacy computation. There are noNCDs which have not been claimed by the investors or not paid by the Company after thedate on which the NCD became due for redemption.

Regulatory Guidelines / Amendments

The Company is in compliance with all regulations pertaining to Accounting StandardsPrudential norms for asset classification income recognition provisioning capitaladequacy and credit rating.

Risk Management Framework

The Company has an effective Risk Management Framework in place to manage the risksfaced in the course of its business.

The Risk Management Framework encompasses all of the Company's activities paving a pathtowards the Company becoming a stable scalable and sustainable business.

The Company's Risk Management Committee (RMC) comprises of its directors and members ofits senior management team who have several years of experience in the industry and haveput in place preventive mechanisms to contain various risks. The RMC met multiple timesduring the year ending March 31 2017 continuously monitoring emergent risks the Companywas exposed to. The RMC put in place or enhanced the control measures to contain theserisks. Systems policies processes and procedures are reviewed on an ongoing basis tocontain and mitigate emergent risks.

Codes and Standards

The Company adheres to the Fair Practices Code (FPC) recommended by sector regulatorthe National Housing Bank (NHB) as well as the RBI put in place to promote good and fairpractices by setting minimum standards in dealing with customers. The NHB also has issuedcomprehensive Know Your Customer (KYC) Guidelines and Anti Money Laundering

Standards in the context of recommendations made by the

Financial Action Task Force on Anti Money Laundering


Cross Selling and Distribution of Financial Products and Services

The FY 2016-17 saw the Company further increase its ‘Smart City Home Loans'branch network deepening reach into tier

II and tier III towns and cities. A digitally enabled online workflow system helps theCompany expand into these locations in a cost-effective manner. The online workflow systempermits operation of lean branches where loan application files are compiled scanned anddigitally logged in.

The file travels digitally and credit underwriting is centralized at regional hubs.

State-of-the-art Customer Care set up helps speedy resolution of customer queries andpromptly attends to any loan requirements. Survey calling where feedback is taken fromexisting and new customers also helps in continuous process improvement and generation ofnew leads.

Training and Human Resource Management

Trainings for more than 5000 employees were conducted in the last financial yearcovering various aspects such as sales excellence leadership usage of digital mediacustomer service data analysis credit risk analysis etc. Majority of the employeesattended multiple sessions based on their job profile. We have state of the art trainingfacility at our Head Office at Gurugram spread over 2300 sq. ft. and at our corporateoffice at Parel Mumbai spread over 11000 sq.ft. where periodic training sessions areorganized by the Training



In keeping with the Company's policy of rewarding its shareholders the Board ofDirectors of the Company had for the year 2016-17 declared three interim dividendsaggregating to Rs. 27/- per share on shares of face value Rs. 2/- each ( Rs. 9/- foreach) with the total outflow of Rs. 1374.6 Cr (inclusive of Corporate Dividend Tax).

The Board of Directors of the Company had in its meeting held on April 24 2017declared an interim dividend of Rs. 9/- per share of face value of Rs. 2/- each for theFinancial Year 2017-18. Further the Board of Directors of the Company had in itsmeeting held on July 24 2017 declared second interim dividend of Rs. 9/- per share offace value of Rs. 2/- each for the

FY 2017-18.

During the year the unclaimed dividend pertaining to the

FY 2008-09 got transferred to Investor Education and Protection Fund after giving duenotice to the members.

Those members who have not so far claimed their dividend for the financial yearssubsequent to 2008-09 are also advised to claim it from the Company or KarvyComputershare Private

Limited the Registrar & Transfer Agent (RTA).

In compliance with requirements stipulated vide SEBI notification no. SEBI/LAD-NRO/GN/2016-17/008 dated

July 8 2016 the Dividend Distribution Policy of the Company is available on thewebsite of the Company i.e. www.


To achieve the highest standards of Corporate Governance in its management and tointroduce a true sense of professionalism in the Board of the Company and to ensurecontinuity of guidance during the FY 2016-17 the existing Independent Directors namelyJustice Bisheshwar Prasad Singh (Retd. Justice Supreme Court of India) (DIN: 06949954)

Brig Labh Singh Sitara (Ex-army official and Dhyanchand award winner sportsman) (DIN:01724648) Mr. Shamsher Singh Ahlawat (DIN: 00017480) and Mr. Prem Prakash Mirdha (DIN:01352748) were appointed as Independent

Director w.e.f. September 29 2016. Further Justice Gyan Sudha Misra (Retd. JusticeSupreme Court of India) (DIN:

07577265) was appointed as an Independent Director of the Company w.e.f. September 292016. Further pursuant to authorization dated September 29 2014 of the members of theCompany the two year term of Justice Surinder Singh Nijjar (Retd. Justice Supreme Courtof India) (DIN: 06964806) as Independent Director of the Company comes to an endeffective on September 28 2016. The Board places on record its appreciation for thecontribution made by Justice Nijjar during his tenure on the Board of the Company.

In accordance with the provisions of Section 152 of the Companies Act 2013 (Act) andin terms of the Memorandum and Articles of Association of the Company Mr. Ajit Kumar

Mittal (DIN: 02698115) Executive Director and Mr. Ashwini

Omprakash Kumar (DIN: 03341114) Deputy Managing

Director of the Company retire by rotation at the ensuing Annual General Meeting ofthe Company and being eligible offer themselves for reappointment. Further The existingtenure of Mr. Sameer Gehlaut (DIN: 00060783) as a Whole

Time Director and Key Managerial Personnel designated as Executive Chairman and otherWhole-Time Directors and Key Managerial Personnel namely Mr. Gagan Banga (DIN:00010894) designated as Vice-Chairman Managing

Director & CEO; Mr. Ajit Kumar Mittal (DIN: 02698115) designated as ExecutiveDirector; and Mr. Ashwini Omprakash Kumar (DIN: 03341114) designated as Deputy Managing

Director shall come to an end on March 18 2018. The Company has grown significantlyunder the leadership and guidance of all its Whole-time Directors. Keeping in view theirvast experience knowledge and managerial skills the Nomination & RemunerationCommittee has recommended to the Board the re-appointment of Mr. Sameer Gehlaut Mr.Gagan Banga

Mr. Ajit Kumar Mittal and Mr. Ashwini Omprakash Kumar Whole-Time Directors and KeyManagerial Personnel as such for a further period of five years w.e.f. March 19

2018. Further Mr. Sachin Chaudhary (DIN: 02016992) was appointed by the Board ofDirectors as an Additional Director designated as Whole-time Director and Key Managerial

Personnel of the Company for a period of 5 years with effect from October 21 2016. Theappointment/re-appointment of all these Whole-time Director(s) is in compliance with theapplicable provisions of the Companies Act 2013 and requires the approval of theshareholders at ensuing Annual General meeting. The Board recommends appointment/reappointment of all these Directors.

All the present Independent Directors of the Company have given declaration that theymeet the criteria of independence laid down under Section 149(6) of the Companies Act2013. The present composition of the Board along with the brief resume of the Directorsproposed to be appointed/ reappointed nature of their expertise in specific functionalareas terms of appointment and names of companies in which they hold directorships andmemberships/chairmanships of Board Committees are provided in the Notice convening the12th Annual General Meeting of the Company.


The paid up equity share capital of the Company as on March 31 2017 was Rs.847712080 comprising of 423856040 equity shares of Rs. 2/- each. Subsequently fromApril 1 2017 till date the Company had allotted 491560 equity shares of face value Rs.2/- each against exercise of equivalent number of stock options under various ESOP Schemesof the Company as a result of which the paid up equity share capital of the Companystands increased to Rs. 848695200 comprising of 424347600 equity shares of Rs. 2/-each.

The disclosures required to be made in compliance with the applicable regulations areset out in the Annexure to this Report and have been placed on the website of the Company


(a) issuance of iNR 13300000000 8.567 per cent. Secured Synthetic iNR Notes due 2019by the Company listed at Singapore exchange Securities Trading Limited

During the FY 2016-17 the Company has successfully raised Rs. 13300 Million by issueof Secured Rupee denominated Masala Bonds bearing a coupon of 8.567% and having a tenor of3 years and 1 month. These bonds are listed on Singapore Stock Exchange (SGX-ST).

(b) issuance of Secured and Unsecured NCDs by way of Public issue having face valueof Rs. 1000 each for an amount aggregating to Rs. 70000 million listed atBSe and NSe

During the FY 2016-17 the Company has successfully raised Rs. 70000 million by way ofpublic issue of Secured and Unsecured NCDs having a face value of Rs. 1000 each. The saidNCDs are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).

(c) issuance of Secured and Unsecured NCDs by way of Private Placement basis

During the FY 2016-17 the Company has successfully raised by way of privateplacement Rs. 10741.50 Crore of Secured NCDs having a face value of Rs. 1000000 eachRs. 3200 Crore of Secured NCDs having a face value of Rs. 1000000 each {paid-up valueRs. 1600 Crore i.e. Rs. 500000 per NCD paid-up (Initial Subscription Amount)} and Rs.609.70 Crore Unsecured NCDs having a face value of Rs. 100000 each. The said NCDs arelisted on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).

(d) Details of NCDs which have not been claimed by the investors

There are nil NCDs which have not been claimed by the Investors or not paid by theCompany after the date on which these NCDs become due for redemption.


During the year under review the Company has not accepted any deposits from thepublic falling within the ambit of Chapter V of the Companies Act 2013 and the Companies(Acceptance of Deposits) Rules 2014.


The Equity Shares (ISIN INE148I01020) of the Company continue to remain listed at BSELimited (BSE) and National Stock Exchange of India Limited (NSE). The listing fees payableto both the exchanges for the financial year 2017-18 have been paid. The GDRs issued bythe Company continue to remain listed on Luxembourg Stock Exchange. The Secured SyntheticINR Notes are listed on Singapore Stock Exchange (SGX-ST). The NCDs issued under IPO andon Private Placement basis are listed on WDM segment of NSE and BSE.


(a) Statutory Auditors

In compliance with the applicable provisions of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 the existing term of M/s

Deloitte Haskins & Sells LLP (Firm Regn. No. 117366W/

W-100018) Chartered Accountants as the Statutory Auditors of the Company shall cometo an end at the conclusion of the ensuing Annual General Meeting of the Company. TheBoard places on record its appreciation for the services rendered by M/s. Deloitte Haskins& Sells LLP as the Statutory Auditors of the Company.

The Board on the recommendation of the Audit Committee have recommended for theappointment of M/s S.R. Batliboi & Co. LLP Chartered Accountants (ICAI RegistrationNo.: 301003E/E300005) as the Statutory Auditors of the Company for a term of 5 yearssubject to ratification of their appointment by the members at every intervening AnnualGeneral Meeting held after this Annual General Meeting. Consent and certificate underSection 139 of the Companies Act 2013 have been obtained from M/s S.R. Batliboi & Co.LLP Chartered Accountants to the effect that their appointment if made shall be inaccordance with the applicable provisions of the Act and the Rules issued thereunder. Asrequired under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 M/s S.R. Batliboi & Co. LLP Chartered Accountants has confirmed that they holda valid certificate issued by the Peer Review Board of ICAI.

The Notes to the Accounts referred to in the Auditors' Report are self explanatory andtherefore do not call for any further explanation.

(b) Secretarial Auditors & Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with therules made thereunder the Company has appointed M/s Neelam Gupta & Associates a firmof Company Secretaries in practice as its Secretarial Auditors to conduct the secretarialaudit of the Company for the

FY 2016-17. The Company has provided all assistance facilities documents records andclarifications etc. to the Secretarial Auditors for conducting their audit. The

Report of Secretarial Auditors for the FY 2016-17 is annexed as "Annexure 1"and forming part of this Report.

The Report is self explanatory and therefore do not call for any further explanation.


As part of its initiatives under "Corporate Social Responsibility (CSR)" theCompany has undertaken projects in the areas of Health Education Sanitation Nutritionand Rural Development as per its CSR Policy (available on your

Company's website and the details are contained inthe Annual Report on CSR Activities given in "Annexure 2" forming part of thisReport. These projects are in accordance with Schedule VII of the Companies Act 2013 readwith the relevant rules.


Pursuant to Regulation 34 of the SEBI LODR Regulations

Management's Discussion and Analysis Report for the year under review is presented ina separate section forming part of this Annual Report.


Pursuant to Regulation 24 of the SEBI LODR Regulations a separate section on CorporateGovernance Practices followed by the Company together with a certificate from apracticing Company Secretary confirming compliance is presented in a separate sectionforming part of this Annual Report.


Pursuant to Regulation 34 of the SEBI LODR Regulations mandates inclusion of theBusiness Responsibility Report (BRR) as part of the Annual Report for top 500 listedentities based on market capitalization. In compliance with this regulation BRR ispresented in a separate section forming part of this Annual Report.


To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134 of the Companies Act 2013: a) that in the preparation of the annual financialstatements for the year ended March 31 2017 the applicable accounting standards had beenfollowed along with proper explanation relating to material departures if any; b) thatsuch accounting policies as mentioned in the Notes to the Financial Statements have beenselected and applied consistently and judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 31 2017 and the profit and loss of the Company for the year ended onthat date; c) that proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act

2013 for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities; d) that the annual financial statements have been prepared on agoing concern basis; e) that proper internal financial controls were in place and thatsuch financial controls were adequate and were operating effectively; and f ) that systemsto ensure compliance with the provisions of all applicable laws were in place and wereadequate and operating effectively.


The information required to be disclosed pursuant to Section 134 and Section 197 of theCompanies Act 2013 read with the relevant rules (to the extent applicable) and SEBI LODRRegulations not elsewhere mentioned in this Report are given in "Annexure A"forming part of this Report.


The Company's Environmental Management System (EMS) focuses on assessing theenvironmental cost of the Company's services and activities and seeks to reduce oreliminate the negative impact and increase their positive effects.

The ISO 14001:2015 specifies the requirements for EMS such that the negativeenvironmental impact is minimized and overall environmental performance improves. ISO14001 is an systematic framework that checks adherence to environmental performancestandards and also seeks to continuously improve it.

Environmental sustainability is important to the Company and is one of the reasonsbehind the Company's push to digitize its processes. Amongst its peers the Company hastaken the lead in introducing an end-to-end online home loan application and fulfillmentplatform doing away with the traditional pen and paper process which also involvedphysical transfer of loan application files. The ISO 14001:2015 certification helps theCompany document its process from an environmental perspective and importantly gives it ameans to measure and minimize the environmental impact of its operations.

Electronic copies of the Annual Report 2017 and Notice of the 12th AGM are sent to allthe members whose email addresses are registered with the Company / DepositoryParticipant(s).

For members who have not registered their email addresses physical copies of theAnnual Report 2017 and Notice of the 12th AGM are sent in the permitted mode.

The Company is providing e-voting facility to all members to enable them to cast theirvotes electronically on all resolutions set forth in the Notice of the 12th AGM. This ispursuant to Section 108 of the Companies Act 2013 and Rule 20 of the Companies(Management and Administration) Rules 2014 as substituted by Companies (Management andAdministration) Amendment Rules 2015 and Regulation 44 of the SEBI LODR Regulations. Theinstructions for remote e-voting are provided in the Notice convening the 12th AGM.


Your Company has been able to operate efficiently because of the culture ofprofessionalism creativity integrity and continuous improvement in all functional areasand the efficient utilization of all its resources for sustainable and profitable growth.Your Directors wish to place on record their appreciation of the contributions made andcommitted services rendered by the employees of the Company at various levels. YourDirectors also wish to express their gratitude for the continuous assistance and supportreceived from the investors clients bankers regulatory and government authoritiesduring the year.

For and on behalf of the Board of Directors
Sd/- Sd/-
Gagan Banga Ajit Kumar Mittal
Vice-Chairman Managing Director & CEO Executive Director
Date: July 24 2017
Place: Mumbai (DIN: 00010894) (DIN: 02698115)