<dhhead>Management Discussion and Analysis</dhhead>
The global economy enters CY 2025 navigating a complex but evolving landscape, with real GDP growth expected to moderate to around 2.8% in CY 2025, before edging up to 3.0% in CY 2026. After a relatively stable expansion of 3.3% in CY 2024, the coming year brings both challenges and opportunities. Geopolitical tensions are rising, and major policy changes, particularly broad tariff revisions by the US, have increased uncertainty. At the same time, a wider shift is underway as economies adjust their priorities in response to a more multipolar global order.
The global economy remains strong despite short-term challenges. Inflation is easing, though more slowly than anticipated. Global headline inflation is expected to reach 4.3% in CY 2025, and decline to 3.6% in CY 2026. This trend reflects the impact of earlier monetary tightening and improved supply chain efficiencies. Although the near-term outlook remains complex, it offers economies an opportunity to build stronger foundations. The adaptability shown during recent disruptions, from supply chain breakdowns and tariffs to inflationary pressures, indicates that recovery is possible with the right policy mix and reforms. Moving through CY 2025 and into CY 2026, a renewed focus on international cooperation will be essential to stabilise trade relations, reduce geopolitical tensions, and restore investor confidence.
(Sources: IMF Report on World Economic Outlook, April 2025, OECD)
Indias economy is expected to maintain its growth momentum, with GDP expanding by 6.5% in 2024-25 and a similar growth rate of 6.5% projected for 2025-26. This places the country on track to become the worlds third-largest economy by 2026-27, and the third-largest consumer market by 2025-26. Amid ongoing global uncertainty, Indias growth remains underpinned by solid domestic demand, increases in private investments, and targeted policy reforms.
Stable food prices, effective government interventions, and a favourable monsoon have helped keep inflation in check, within the 4-4.5% range, close to the Reserve Bank of Indias (RBI) target. The RBIs Monetary Policy Committee lowered its 2025-26 inflation forecast to 3.7% following a sustained decline in consumer prices.
On the fiscal front, revenue deficit is also on a declining trend and is expected to reduce from 4.8% of GDP in 2024-25 to 4.4% of GDP in 2025-26, reflecting strong remittance inflows and contained oil import costs. These figures indicate healthy external balances, a positive sign given the global slowdown and disruptions in trade.
Global developments like the shift towards protectionism, evident in the rise of effective tariff rates, are shaping Indias trade dynamics. Although these trends pose challenges, they also create medium- term opportunities. Indias strategic position in the China Plus One supply chain diversification is strengthening. The government may reduce tariffs selectively to enhance export competitiveness.
The Union Budget for 2025-26 sets the stage for inclusive growth while ensuring fiscal discipline. It prioritises capital expenditure, with increased funding for infrastructure projects, including roads, railways, and renewable energy. Allocations for agriculture, MSMEs, and rural development are also enhanced, aiming to stimulate consumption and employment, especially in non-urban regions.
Micro, small, and medium enterprises (MSMEs) remain vital players in supply chains, with healthy growth across various industries. They continue to drive innovation and diversify Indias manufacturing base, contributing significantly to the economys broader growth. In line with this, the Union Budget 2025-26 had also introduced a series of measures aimed at strengthening the MSME sector by raising investment and turnover limits, improving credit access, supporting first-time entrepreneurs, and launching sector-specific productivity initiatives.
Investment and financial markets are benefiting from significant credit growth, particularly from private banks and NBFCs, and increased domestic investor participation. Structural reforms are also playing a key role. Government initiatives in infrastructure, digitalisation, and financial inclusion are boosting productivity, efficiency, and access. These efforts are setting the stage for sustained medium-term growth. Indias digital economy is also flourishing, driven by smartphone penetration, fintech adoption, and a vibrant startup ecosystem. Government initiatives like UPI and ONDC are enhancing digital commerce, with UPI transactions reaching 24.77 Lakh crores in March 2025, marking a 36% year- on-year (Y-o-Y)increase.
(Source:https://economictimes.indiatimes. com/news/economy/ agriculture/foodgrain-output-set-to-scale-new-peak-in-2025-as-farm- sector-eyes-4-pc-growth/articleshow/116761745.cms?from=mdr)
Indias outlook for 2025-26 remains stable and optimistic. The economy is expected to navigate global challenges better than many peers, supported by strong domestic fundamentals, prudent policies, and structural improvements.
As the world witnesses a period of heightened uncertainty and slower growth, Indias balanced and inclusive growth approach positions it to emerge stronger and more resilient. The nations prospects remain positive, backed by rising domestic consumption, growing digital adoption, and progress in healthcare.
A young, expanding population and rising incomes further support long-term growth. Moreover, continued policy support, robust demand, and structural reforms will help India strengthen its role as a key global economy, driving transformation across multiple sectors.
(Source: https://www.imf.org/en/Countries/IND; https://www. ubs.com/ global/en/investment-bank/insights-and-data/2024/indias-outlook- 2025-2026-story.html;https://india. un.org/en/287164-un-report- forecasts-robust-growth-indian-economy, Economic Survey 2024-25)
Indian Housing Sector Overview
The Indian housing sector remains a key driver of the nations economy, with a projected contribution of 13% to GDP by 202425. This highlights both its strength and potential. Recognising housing as both a fundamental need and a major employment generator, the government continues to support the sector through consistent budget allocations, regulatory reforms, and targeted welfare schemes.
By 2030, the sector is projected to become a USD 1 trillion market, driven by demographic shifts, policy support, and global trends. Tier 2 and Tier 3 cities are emerging as key growth centres. Urban homeownership is also rising, with rates projected to increase from 65% in 2020 to 72% by 2025, propelled by affordable loans, nuclearisation of families, rapid urbanisation, and a younger demographic entering the market.
The sectors upward momentum, reignited in 2023, continued through 2025-26. Residential sales in Indias top eight cities reached 4.5 Lakh units in 2024, marking a 10% annual increase. New launches hit a record 5.6 Lakh units. The beginning of 2025 further strengthened this trend, with 1.4 Lakh units sold and inventory levels falling by 8%.
The mid-segment, priced between 40-80 Lakhs, continues to dominate supply, contributing 34% of new launches. Demand remains strong across all price points. This is supported by stable interest rates, rising disposable incomes, and preferences for bigger homes. There has been a visible shift towards high ticket size home loans partly due to the rise in cost of construction and mainly due to preferences of the upper middle class and High Net-Worth Individuals (HNIs) for availing high ticket size loans for buying bigger or luxury homes.
Despite this progress, Indias housing shortage remains substantial. The shortfall exceeds 31 million units, with an unmet demand of 26 million units concentrated in the Lower Income Group (LIG) and Economically Weaker Sections (EWS). Rural and semi-urban areas carry the heaviest burden.
In urban areas, the shortage is largely due to congestion and poor- quality housing. On the other hand, in rural regions, it stems from the widespread presence of non-serviceable or kutcha homes. Addressing this gap may require 43-45 trillion in additional housing loans, of which 29 trillion would be needed for the EWS/ LIG segments. This far exceeds the 34.5 trillion outstanding as of March 2025, indicating strong growth potential for the housing finance sector. This momentum in housing demand is reflected in the financing scenario, where growth continues to be fuelled by affordability initiatives and expanding credit access.
(Source:https://www.ibtimes.co.in/indian-housing-sector-contribute-
13-pc-national-gdp-by-2025-report-877479)
Indian Housing Finance Market Overview
Indias housing finance market is set to grow steadily in 202425, with outstanding loans projected to reach 34.5 trillion. This reflects a 13% compound annual growth rate (CAGR), as per CRISIL. Growth is driven by rising demand for homeownership, better affordability in smaller cities, and a stable policy environment. Low-income housing loans (<?1.5 million) now account for over half of total loan volume. However, they contribute around 16% to the overall value, highlighting the large customer base in the affordable housing segment.
While banks remain dominant, Housing Finance Companies (HFCs) and NBFCs are steadily expanding, particularly in low-income and semi-formal segments. In 2024-25, HFCs accounted for 39% of disbursements in the 0-0.75 million and 0.75-1.5 million loan brackets. Public sector banks saw a relative decline during the same period. This shift highlights HFCs stronger presence in underbanked regions and their flexible approach to lending, especially for borrowers without formal income proof. There is a visible shift of banks and prime home loan-focussed HFCs towards high-ticket-size home loans, while the share of all other HFCs for loans up to 25 Lakhs has remained more or less the same over the last five years.
Government-backed schemes such as the Pradhan Mantri Awas Yojana (PMAY) and refinancing from the National Housing Bank (NHB) continue to provide an essential cushion for first-time homeowners, ensuring inclusivity in credit growth.
Asset quality remains solid, with housing finance continuing to be one of the most secure lending segments. Gross NPAs for housing loans stood at only 1.3-1.4% in 2024-25, much lower than the NPAs in MSME or auto finance sectors.
Indias housing sector benefits from strong structural growth drivers. These drivers continue to shape demand and create long-term opportunities across the market. The following factors highlight the key elements supporting this sustained momentum:
• Demographics, including a young and growing population, support long-term housing demand.
• Mortgage penetration remains low, with a Mortgage-to-GDP ratio below 11%, highlighting credit expansion potential.
• Government programmes have enhanced housing finance access for underserved segments.
• Household incomes are rising, and the shift to nuclear families is increasing the demand for independent housing.
• Lending conditions remain stable, and controlled interest rates keep home loans affordable.
• Rapid urbanisation
• Infrastructure development and improved digital connectivity in smaller cities are expanding access to the formal housing market..
All these developments collectively encourage broader participation from developers and homebuyers.
Despite the sectors strong performance, several challenges continue to affect its growth trajectory. The following points outline the key issues that persist:
• Affordability remains a hurdle in urban centres, where home prices exceed the capacity of low-income buyers.
• Policy support exists but has not fully bridged the affordability gap for economically weaker sections.
• Housing quality in rural and semi-urban areas remains poor, with many homes lacking basic amenities or structural integrity.
• Supply of affordable homes continues to fall short of demand as big builders are focussed in construction of high value homes.
• I nput costs, including materials and labour, are on the rise, raising expenses and worsening affordability.
• Interest rate sensitivity continues to affect the sector and may weaken sentiment among low-income and price-sensitive buyers.
• Regulatory requirements continue to evolve, challenging developers and housing finance institutions, and delaying project execution and loan disbursal.
• External risks such as global inflation, trade disruptions, and geopolitical tensions could impact capital flow and investor confidence.
The Indian housing sector in 2025-26 continues to play a vital role in driving economic development. It is supported by rising demand, steady credit growth, and firm policy backing. Residential sales are rising, with growing activity in Tier 2 and Tier 3. A supportive financial ecosystem underpins the sectors resilience and long-term promise.
Affordability, quality, and cost pressures remain the main concerns, especially for low-income groups. However, coordinated public and private efforts are improving access and inclusivity. With favourable demographics, rising ownership aspirations, and an enabling policy and infrastructure framework, the sector is poised to aid Indias growth and transformation.
(Sources: https://www.ibtimes.co.in/indian-housing-sector-contribute- 13-pc-national-gdp-by-2025-report-877479
https://economictimes.indiatimes.com/industry/services/property-
/-cstruction/housing-demand-in-india-to-reach-93-million-by-2036-
report/articleshow/106659577.cms)
Aadhar Housing Finance Limited (also referred to as Aadhar or the Company) is one of Indias largest housing finance institutions focussed on low-income housing finance. It primarily serves economically weaker and low-to-middle-income customers who require small-ticket mortgage loans.
With a mission to support homeownership among individuals in salaried, self-employed, and informal sectors, Aadhar offers a wide range of loan products. These include loans for residential property purchase and construction, home improvement and extension, commercial property construction and acquisition, and loans against residential properties. The micro-LAP products typically have a ticket size of 8-9 Lakhs.
As of March 31, 2025, Aadhars Assets Under Management (AUM) stood at 25,531 crores. It operates through a robust network of 580 branches across 21 States and Union Territories. With coverage across more than 11,600 pin codes, the Company ensures a strong presence in both urban and semi-urban areas throughout India.
The Companys digital-first, scalable technology platform improves both operational efficiency and customer experience. With fully digital acquisition and paperless onboarding, the Company enables faster turnaround times and seamless loan processing. Its core systems, supported by Tata Consultancy Services (TCS) and other leading technology partners, integrate end-to-end digital journeys across onboarding, underwriting, and collections. This strengthens the Companys ability to scale operations with speed, transparency, and reliability.
Aadhar is backed by a strong promoter, Blackstones BCP Topco VII Pte. Limited, which held a 75.6% stake as of March 31, 2025. This association has enabled the Company to draw on Blackstones global expertise in corporate governance and financial management. The Company has a well-balanced Board comprising independent directors and seasoned professionals with deep industry knowledge in housing finance and banking.
Social responsibility remains a core part of Aadhars business model. The Company actively contributes to economic upliftment through partnerships with government initiatives such as PMAY-G, promotes financial inclusion, and drives employment across urban and semi-urban regions. With a value-driven ESG framework and a focus on inclusive growth, Aadhar aims to create lasting value for its stakeholders.
The Company is a retail-focussed housing finance company (HFC) that primarily serves the low-income housing segment. It primarily targets economically weaker and low-to-middle-income individuals seeking small-ticket mortgage loans. Most customers are first-time home buyers with limited access to formal credit. Aadhar also provides loans against property, as well as financing for property renovation, extensions, purchase of commercial properties and self-occupied residential properties.
The Company continues to show strong growth across various key metrics. The following highlights reflect its performance for the year 2024-25:
• Number of loan accounts increased to 2,99,000+ as of 202425, up from 2,66,000+ at 2023-24s end.
• AUM grew by 21 % YoY, reaching 25,531 crores as of 202425, compared to 21,121 crores at 2023-24 end.
• Disbursements reached 8,192 crores in 2024-25, rising from 7,072 crores in the previous year.
• GNPA decreased to 1.05% as of 2024-25, compared to 1.08% at 2023-24 end.
• Liquidity at 2,200 crores as of 2024-25.
• Capital adequacy ratio stood at 44.6% as of March 31, 2025, including Tier 1 at 44.1% and Tier 2 at 0.5%, up from 38.4% in
2023- 24.
• Number of branches and offices increased to 580 as of 202425, up from 534 branches at 2023-24 end.
• The customer-mix by AUM comprised 56% salaried individuals and 44% self-employed individuals, as of March 31, 2025.
• Product mix continued to favour home loans, which formed a major part of the portfolio.
• Average ticket size rose to 10.3 Lakhs, with a stable loan-to- value ratio of 59%, consistent with the previous year.
• Directly assigned loan portfolio amounted to 4,362 crores in
2024- 25, including 1,582 crores of fresh assignments during the year.
• Co-lending portfolio stood at 592 crores at the 2024-25 end, with 143 crores added during the year.
Aadhar uses a diverse range of lead sourcing channels, including Direct Selling Teams, Direct Selling Agents, Aadhar Mitras, Mahila Aadhar Mitras, digital platforms, and call centres. It also focusses heavily on ground-level outreach through market combing, loan camps, and marketing initiatives. These efforts help front-end teams connect with their target customers more effectively.
In alignment with the governments aim of financial inclusion, Aadhar actively supports and participates in key affordable housing initiatives such as the Pradhan Mantri Awas Yojana (PMAY). This enables economically weaker and lower-income to access interest subsidies on their home loans.
Standalone Financial Performance
• Total income increased by 20% Y-o-Y for the year ended March 31, 2025.
• Operating expenses are very stable, with the cost-to-income ratio at 36.4% in 2024-25.
• Profit after Tax (PAT) stood at 912 crores in 2024-25, a 22% increase over 750 crores in 2023-24.
• Aadhar achieved a strong Return on Assets (ROA) of 4.3% in 2024-25, up from 4.2% in 2023-24.
• Return on Equity (ROE) for 2024-25 was 16.9% (including IPO primary gross portion of 1,000 crores), indicating sustained strong profitability and efficient capital utilisation.
The housing finance sector in India holds immense growth potential, fuelled by rapid urbanisation, rising incomes, and strong government support for affordable housing. Despite recent progress, Indias Mortgage-to-GDP ratio remains far below global standards, offering significant room for expansion.
Demand is particularly strong for smaller ticket loans, with disbursements under 2.5 million accounting for nearly more than two-thirds of the market. As India continues to lead global population growth in the coming decade, the need for accessible housing finance, especially in underserved areas, will only intensify.
Recognising this opportunity, the Company has built a robust and agile business model to capture growth across the low- and middle- income segments. As of 31 March 2025, the Company operates a strategically diversified network of 580 branches across 21 States and Union Territories, supported by a flexible branch classification system tailored to local demand dynamics. This targeted approach, combined with a deep understanding of semi-urban and rural markets, positions the Company to effectively penetrate tier 4 and tier 5 towns and drive financial inclusion.
Parallelly, Aadhar continues to strengthen its digital ecosystem to enhance customer experience, improve operational efficiency, and support scalable growth. Its integrated technology platform enables paperless onboarding, real-time loan processing, and seamless integration with fintech partners. Through advanced data analytics, the Company is embedding predictive insights into risk management, underwriting, and collections. This ensures agility, future-readiness, and alignment with evolving customer needs. Combining its extensive physical presence with a robust digital infrastructure, the Company is well-positioned to capitalise on the next phase of growth in Indias affordable housing finance sector.
Advanced data analytics are now embedded throughout Aadhars operations. This enables initiatives such as customer risk categorisation, scorecard development, early warning systems for collections, balance transfer monitoring, and branch location identification. These analytics-driven insights are integral to the Companys strategy, enhancing risk management and supporting informed decision-making across all key functions.
From a funding perspective, the Company follows a diversified borrowing strategy. As of 2024-25, 53% of borrowings are from banks, 23% from the NHB, and 21% from NCDs and 3% from ECB. Aadhar continues to conduct direct assignment of portfolios with both public and private sector banks. It has also established colending partnerships with two public sector banks, broadening its funding base and reducing costs.
The Company has successfully raised its maiden External Commercial Borrowing (ECB) of USD 50 million in 2024-25. This strategic milestone marks a significant step in diversifying its funding sources and optimising its cost of capital. ECB was raised from a reputed international bank, reflecting strong confidence in Aadhars robust business fundamentals, prudent risk management practices, and long-term growth prospects in the affordable housing finance segment. The funds will be primarily utilised to enhance our lending capacity, support portfolio growth, and further our mission of providing accessible housing finance solutions to underserved segments across India. This successful transaction underlines the Companys continued efforts to tap into global markets for longterm funding and reinforces our commitment to financial inclusion and sustainable growth.
The Company remains focussed on the low-income housing mortgage segment, serving economically weaker and low-to- middle-income groups. It enables credit access for individuals in urban and semi-urban areas, where formal banking options are still limited. Aadhar provides tailored mortgage loans to both salaried and self-employed individuals. This includes those in informal sectors who often lack standard income proofs such as salary slips or tax returns, making them ineligible for traditional banks and large financial institutions.
The Company adopts a dynamic distribution strategy, classifying branches by size and service focus to optimise operational costs and ensure broad coverage. Its network includes Main Branches, Small Branches, Micro Branches, Ultra-Micro Branches, and Deep Impact Branches. Each type serves specific regional needs and customer densities. This tiered model allows the Company to efficiently serve diverse geographies, especially urban and semi-urban areas, while maintaining cost control.
The Deep Impact Branches form a vital part of the Companys strategy. These branches operate in remote and underserved areas, mainly in Tier 4 and Tier 5 towns, addressing the housing finance needs of economically weaker sections. In addition, Aadhar engages with the local community through Aadhar Mitras, who are individuals from non-allied businesses such as vegetable vendors, kirana shop owners, cement dealers, and salon owners, among others. They support lead generation, strengthening the Companys grassroots presence.
Using its deep experience and specialised business model, the Company has built solid underwriting and risk management processes that effectively serve this underbanked segment. A key element of its customer evaluation involves structured personal interviews. These help collect behavioural insights and alternative data where formal documents are lacking.
With a robust infrastructure and increasing use of data analytics for credit assessment, customer segmentation, and risk control, the Company is improving operational efficiencies and optimising its cost-to-income ratio. These strategic actions are expected to support sustainable growth in 2025-26, while keeping NPA and credit cost levels low, maintaining interest spreads, and delivering strong return ratios. Overall, this strategic and scalable distribution approach extends customer reach, boosts operational efficiency, and supports Aadhars goal of inclusive housing finance.
While the Company caters to both salaried and self-employed customers, focus also remains on the more stable salaried segment. As of 2025, salaried customers constituted approximately 56% of the AUM, with a majority having formal income credited directly to their bank accounts. Meanwhile, 44% of the AUM was attributed to self-employed individuals, a significant share of whom came from informal backgrounds without formal income documentation.
The Company continues to enhance customer service through a combination of digital tools and regional engagement. It enables EMI payments via online platforms and supports customers with welcome calls in regional languages. CRM systems and multilingual SMS alerts in five vernacular languages further improve communication. Branches display notices in both English and local languages to ensure better outreach. Customers can activate NACH mandates through online facilities, adding to the convenience. To maintain service quality, the Company conducts biannual training sessions for branch and call centre staff. It also shares customer FAQs and grievance redressal officer details on its website for easy access.
The Companys digital customer service has gained strong traction, with its mobile app and service web portals contributing to ease of access and engagement. As of 2024-25, the Company has over 2,99,000+ live accounts, continuing its strong growth trajectory from 266,000+ accounts in 2023-24, 233,000+ in 2022-23, 204,000+ in 2021-22, and 182,000+ in 2020-21.
Aadhar employs a multi-channel loan sourcing strategy that blends direct and indirect approaches to effectively reach its target audience. At the heart of its sales operations are Direct Selling Teams (DSTs) and Relationship Managers, who drive customer acquisition. They are supported by Direct Selling Agents (DSAs) and grassroots contributors known as Aadhar Mitras, Digital Aadhar Mitras and Mahila Aadhar Mitras, who act as lead generators.
Aadhar Mitras are individuals from non-allied industries such as shopkeepers, local vendors, or service providers, who refer potential borrowers to the Company. Each successful referral resulting in a loan disbursement earns the Aadhar Mitra a referral fee. The Mahila Aadhar Mitra initiative aims to bring more women into the referral network. This not only helps expand outreach but also promotes womens empowerment.
Additionally, the Company uses corporate channel partners and a range of digital platforms, including lead aggregators, its official website, and social media, to attract potential borrowers. The Digital Aadhar Mitra programme further strengthens this digital outreach, enabling seamless lead generation and customer engagement.
Common Services Centres (CSC) are one of the crucial enablers of the Digital India Programme. They are the access points for delivery of various e-governance and business services to citizens in rural and remote areas of the country.
Being a pioneer in the affordable segment, we signed the agreement with CSC and integrated with their portal so CSC VLEs share leads with us and our team works on that lead for eligible customers.
India Post Payments Bank (IPPB) was set up under the Department of Post, Ministry of Communication, with 100% equity owned by the Government of India.
We did tie up with IPPB and integrated with their application, where postmen and Gramin Dak Sevaks, refer home loan prospects with us and our team processess it further in our application.
JK Cement Ltd. is one of Indias leading manufacturers of Grey Cement and one of the leading White Cement manufacturers in the world. We mutually agreed for the retail segment where customers approach for buying cement or contact engineers from JK for renovation/extension or construction of homes. They share interested prospects for availing loans for the construction, and we work on the referred customers.
Such a comprehensive distribution model enables the Company to balance physical and digital outreach, ensuring a strong presence across urban, semi-urban, and deeper locations in the country while advancing its ambition of providing inclusive housing finance.
The Company operates across India through a well-diversified and rapidly expanding network of 580 branches as of 2024-25. This network spans 21 States and Union Territories and covers over 11,600 pin codes, enabling Aadhar to serve customers in 545 districts with a balanced geographic presence.
In 2024-25, the Company added 57 new branches to its network, further extending its reach. Of these, 15 branches were either Deep Impact branches or sales offices, established in tier 4 and 5 towns to serve the underserved housing finance segment.
The Company continues to follow a cost-efficient and agile branching strategy, classifying its network into Main Branches, Small Branches, Micro Branches, Ultra-Micro Branches, and Deep Impact Branches based on the local business potential. This categorisation is determined by portfolio size, performance, branch vintage, and operating expenses. By aligning branch formats with regional needs and potential, the Company ensures operational flexibility and efficiency, helping maintain lower operating costs and ensure deeper market penetration, particularly in semi-urban and rural areas.
The Companys Gross AUM remains well diversified, with the top two states accounting for only 27% of the overall AUM and no state contribution more than 14%, As part of its sustainable growth strategy, no state contributes more than 14% of the Companys branch network, annual disbursement and AUM. This disciplined geographical diversification, combined with focussed expansion and technological integration, positions the Company as a leading player in the affordable housing finance segment, committed to inclusive growth and sustainable profitability.
The Company has a variety of cutting-edge solutions aimed at enhancing customer satisfaction, boosting operational efficiency, and ensuring adherence to regulatory standards. The implementation of WhatsApp messaging for customer interactions has led to improved delivery rates and has proven to be more cost- effective than traditional methods of communication via SMS or physical letters. Additionally, the Company has enabled sharing of PDF letters via WhatsApp, which has further reduced expenses related to physical letter dispatches and improved delivery speed.
The Document Tracking System (DTS) now offers centralised storage of security documents along with an enhanced level of tracking. The Company has also introduced a digital Welcome Call Kit, delivered to customers as a link via SMS and WhatsApp, containing all critical loan-related details, such as the MITC and repayment schedule, among others. This kit also provides an option to download the Companys mobile app, which customers can use to access various other services, thereby enriching their experience.
The Company has upgraded its loan system to comply with the data requirements of Credit Information Companies (CICs), achieving a Quality Index score exceeding 99%, surpassing the standards set by the RBI. Furthermore, it has automated SMS notifications for DPD reporting and initiated an educational series through WhatsApp, delivering daily process insights and essential communications to employeesparticularly aiding new hires.
The Company has also upgraded its Loan Management System (LMS) to charge interest from the date of cheque handover, ensuring flawless accuracy in interest calculation. Another significant advancement is the establishment of customer service call centres with calling teams proficient in regional languages. The Companys customer service executives are able to communicate in 11 regional languages, ensuring that customers are engaged in a language that is familiar and easy to understand, thereby enhancing comfort during interactions.
Additionally, the Company has introduced online payment options, allowing customers to conveniently make payments for fees, charges, and overdue EMIs, among others. Collectively, these innovations have significantly enhanced customer service, streamlined operations, and fostered revenue growth.
To enhance operational efficiency and accuracy in credit processing, several key system improvements have been implemented. The introduction of the Bank Statement Analyser has significantly reduced manual effort in assessing bank statements. Bank statements are now automatically analysed by the system, generating a detailed report covering Average Bank Balance (ABB), salary credits with dates and amounts, regular debits, EMI tracking, fraud indicators, etc. within minutes. This has improved the accuracy of data and analysis, while also reducing the overall loan application processing time.
The Company has also implemented a Reject Score Card, which, at the time of onboarding a loan application, allows the system to cross-check key borrower parameters such as demographics and credit history (through credit bureau reports). All non-considerable cases are rejected automatically by the system at the initial stage, thereby eliminating redundant application processing and enhancing overall efficiency.
Credit Approval and Disbursement Process
Aadhar follows a structured and thorough credit underwriting process that combines digital tools with manual checks. This ensures strong risk evaluation while supporting financial inclusion. Trained credit officers guide the underwriting approach, balancing speed, accuracy, and customer understanding, serving both formal and informal employment segments.
For formally employed customers, the Company utilises technology-enabled tools to verify essential information such as KYC documents, PAN, Aadhaar, Voter ID, EPF records, TDS data, employer profiles, and income tax returns. This allows for standardised and expedited verifications. In contrast, for informally employed customers, often without formal income proof, credit managers visit homes and businesses. They assess income using defined field protocols, ensuring fair and consistent evaluations.
The Companys credit processing is supported by both centralised and decentralised mechanisms. For salaried individuals, loan applications are handled through Regional Processing Units (RPUs) across 17 business regions, enabling standardised credit checks, optimised costs, and faster turnaround times. For self-employed or informally salaried customers, processing is decentralised and branch-led, with credit managers conducting ground-level verifications and manual income assessments based on observed business cash flows, living standards, and operational realities.
Customer onboarding at the Company starts digitally. Field executives meet customers in person to collect demographic, income, and KYC details using a mobile application. This ensures real-time data capture and digital authentication through OTP- based e-signatures. Reject scorecard developed by the Data Science team is run on every login to reject leads before they enter the system. This helps in improving the efficiency and productivity of the sales, credit and other functions. The system then uploads the completed applications, which are reviewed by a Centralised Data Entry Team before moving to the Operations Team for further verification.
Subsequently, through the Loan Origination System, applications are assigned to Credit Managers. They check for duplicate records, review credit scores, and conduct a mix of online and offline verifications. These may include telephonic discussions or physical site visits, depending on the customer profile.
The interaction method varies based on customer segments. For formally salaried customers, credit discussions are typically conducted over the phone. For self-employed or informally salaried individuals, credit managers perform physical site visits to evaluate income streams, operating expenses, and overall living conditions. These assessments include capturing timestamped photographs of business premises and are combined with EMI obligations to determine loan eligibility. A detailed Credit Appraisal Memo is then prepared and submitted to the appropriate sanctioning authority for approval.
Before disbursement, each loan application goes through three additional layers of evaluation: legal, technical, and risk containment. The legal assessment is conducted by in-house legal teams and empanelled lawyers to verify property documents and confirm clear title ownership. A Regional Legal Manager reviews all legal reports to ensure accuracy and compliance.
The technical assessment involves engineers and empanelled valuers who carry out site visits and property evaluations. For high- value properties, the process includes third-party valuation reviews. Simultaneously, the Risk Containment Unit conducts trigger-based checks, verifies employment certificates, scrutinises documents, and performs geography-specific risk assessments to identify potential fraud. Additionally, high-risk profiles may undergo early- stage personal verification.
Through this four-layered framework of credit underwriting, legal verification, technical evaluation, and risk containment, the Company enforces robust risk management practices. This enables it to serve a broader, financially underserved population with precision and operational excellence.
Loan Collection and Monitoring
The Company has implemented a structured collections framework. It includes tele-calling, field collections, legal recovery, and settlement mechanisms to ensure timely repayments and reduce delinquencies. At the time of disbursement, customers receive multiple repayment options. These include automated clearing house (ACH), and digital payment modes. To enhance its digital infrastructure, the Company has partnered with leading payment service providers.
To improve collections and support timely payments, the Company collects pre-authorised, auto-debit mandates. Where mandate registration is delayed, post-dated cheques are taken in advance. Additionally, the Companys field executives, supported by third- party call centres, support doorstep collections and customer follow-ups. The Company has been successful in ensuring collection from customers, majorly using direct bank mandates and other digital means, thereby reducing cash handling to a minimum.
Aadhar executes its collection strategy through three structured stages:
With the support of the Data Science Management team, customers identified as likely to default are contacted via SMS alerts, pre-recorded voice messages, and reminder calls from tele-callers. These reminders help in ensuring early EMI payments before an account slips into delinquency.
For customers who enter delinquency, the Company follows a structured recovery approach. Trained in-house collection agents, supported by digital tools and centralised call centres, manage follow-ups.
Each executive handles a portfolio aligned with disbursement volumes in their assigned geography. A collection mobile app supports field operations with features such as offline access, geo-tagging, geo-tracking, route planning, and scorecards. Digital receipts are issued through SMS links. The operations team tracks these collections and ensures timely deposit reconciliation through in-app controls.
In critical or delayed cases, senior collection personnel may visit customers. Legal notices are issued where repayment ability or intent appears doubtful. Additionally, periodic reviews are conducted, with special focus on high-ticket or consistently overdue accounts.
For loans classified as NPAs, the Company initiates collateral recovery under the SARFAESI Act, 2002. It works with local authorities when repossession is required. In-house legal teams and empanelled external lawyers are engaged to initiate and oversee legal processes. Where repossession is not effective, but the customer is contactable, the Company pursues alternative legal actions. These include Section 138 of the NI Act and arbitration proceedings.
All field executives are supported with a mobility solution that provides real-time access to borrower data, enabling targeted collections, prompt issue of digital receipts, and enhanced customer service. This integrated, tech-enabled
approach allows Aadhar to maintain strong asset quality while supporting borrowers with accessible and flexible repayment mechanisms.
The Company maintains a strong and strategic approach to managing its capital requirements and asset-liability obligations through a dedicated treasury department. This department is responsible for liquidity management, interest rate risk mitigation, diversification of funding sources, and the deployment of surplus funds in accordance with the Companys investment policy. It also plays a key role in ensuring optimal capital structure and cost- effective fundraising to support the Companys lending activities and long-term financial stability.
To meet its financing needs, Aadhar taps into a diverse pool of funding sources including term loans, working capital facilities, Non-Convertible Debentures (NCDs), refinancing from the NHB, and subordinated debt from banks, mutual funds, and insurance companies. Aadhar also raises funds via Direct Assignment (DA) and Co-Lending agreements with banks and financial institutions. These arrangements help the Company optimise borrowing costs, enhance liquidity, and ensure sound Asset-Liability Management (ALM).
As of March 31,2025, the Companys borrowings were composed of 53% loans from banks, 23% from NHB refinancing, 21% from NCDs, and 3% from ECB. The treasury team periodically submits detailed ALM reports to the Asset-Liability Management Committee (ALCO), and these insights are further reviewed by the Board of Directors to support strategic decisions.
To prevent cumulative asset-liability mismatches, the Company implements robust ALM strategies, maintaining an appropriate match between asset maturities and liabilities. The Direct Assignment programme, through which the Company sells pools of Home Loans and Loan Against Property (LAP) to PSU and private sector banks, remains central to its borrowing strategy. This approach strengthens relationships with banking partners and enhances funding flexibility.
To ensure secure borrowing arrangements, the Company has appointed a Security Trustee, approved by its secured lenders, who oversees the Companys pledged assets across its banking relationships.
With a flexible and forward-looking fundraising strategy, the Company is actively working to diversify its funding base, identify new capital pools, and explore international funding sources. These efforts are aligned with its objective to continue offering affordable housing finance, while managing risk effectively and maintaining regulatory compliance.
Together, these strategies ensure the Company remains financially resilient, cost-efficient, and well-positioned to scale its operations while serving the underserved housing finance segment across India.
Risk is inherent in all business activities, and the existence of every financial institution depends on how effectively it manages risks. Aadhar recognises that risk management is integral to sound business practices. Therefore, the Company has implemented an enterprise-wide risk management framework that enables it to manage risks and serve customers and stakeholders. Effective risk management leads to informed decision-making within the organisations risk appetite. In this regard, risk management forms part of the continuous improvement process to mitigate risks and maximise opportunities.
The Companys risk management was strengthened across all management levels and functional areas. Risk management roles were distributed across the Board of Directors, Audit Committee and Risk Management Committee. The Chief Risk Officer is
responsible for enterprise risk and is tasked with reviewing, analysing, monitoring, and reporting all significant risk areas to the Executive Risk Management Committee, Risk Management Committee, and the Board.
Aadhar has a risk appetite framework approved by the Board of Directors. This framework covers various types of risk to which the organisation is exposed and clearly defines the boundaries for risk acceptance. There is a clear understanding of the Companys desired risk appetite. As part of the process, the framework is updated in response to changing internal and external environments. This ensures a thorough understanding of and ability to measure the risks the organisation is or may be facing. Furthermore, Aadhar has a well-defined reporting mechanism to highlight stressed risk appetite parameters, along with an escalation and reporting structure to address them.
Aadhar has documented Internal Capital Adequacy Assessment Process (ICAAP) policy and model in place for identifying and measuring risks, maintaining an appropriate level of internal capital relative to its risk profile, applying mitigation techniques, and further developing suitable risk management systems. It also encompasses comprehensive strategies and procedures for continuous evaluation and regular review, composition and distribution of internal capital considered adequate to cover current and future risks in both quantitative and qualitative terms. ICAAP is an ongoing process, and the Company submits a written record of its outcome annually to the Board of Directors.
Details on identification, assessment and measurement, mitigation, and reporting and monitoring of each key risk are provided below:
Credit risk management is a vital component of Aadhars risk management framework, ensuring effective assessment, monitoring, and mitigation of potential losses arising from the inability of borrowers or counterparties to meet their financial obligations.
The Company maintains robust and thorough underwriting systems to ensure the financial soundness of its operations. Its comprehensive underwriting process involves Board-approved policies to effectively manage credit risks, defining customer selection criteria, credit acceptance criteria, credit underwriting processes for sanctioning of loans, and a business mix designed to mitigate portfolio risk.
Portfolio quality improvement is a continuous exercise. The Company has implemented automated analytics to monitor performance of the portfolio basis key parameters and segments like business mix, bouncing, delinquency, branches, and regions.
Operational risk is a complex category and is impacted by numerous factors such as internal business processes, regulatory environment, business growth, customer preferences, technological advancements, new business models/products/services, third- party interactions, and even factors external to the organisation.
Operational risk management is a fundamental component of the Companys broader risk management strategy, focussing on identifying, assessing, and mitigating risks arising from inadequate or failed internal processes, systems, people, or external events. Operational risk is inherent in all financial products, activities, processes, and systems, and encompasses all risks except credit and market risks.
Aadhar has Board-approved Operational Risk Management Policy that defines the framework, governance structure, roles and responsibilities of three lines of defence, training to enhance awareness and risk culture, and operational risk identification and monitoring tools. These include Key Risk Indicators (KRIs) and Early
Warning Signals (EWS) for trend analysis; Risk and Control SelfAssessment (RCSA) to identify risks and assess control effectiveness; and the tracking and analysis of operational risk incidents and losses arising from such events.
The Companys operational risk management framework involves management of the following subcategories of operational risks:
A) Third-Party Risk Management
Increased usage of third-party services requires a structured third-party risk management framework to mitigate risks like third-party dependency, reputational damage, and data breaches involving third parties. Aadhar has defined a framework to identify and reduce risks related to the use of third parties (including intragroup entities) and conducts due diligence before entering into arrangements with them.
As a financing organisation dealing with people and processes, the Company is exposed to frauds, both internal and external. Aadhar has a Risk Containment Unit (RCU) to prevent, detect, investigate, and respond to fraudulent activities across all levels of the organisation. Potential frauds are discussed by the Internal Fraud Risk Committee. Altogether, an effective fraud risk management builds a resilient defence against financial deception.
Aadhar may be susceptible to financial penalties, legal consequences, reputational damage, and material loss if it fails to comply with legal regulations, industry standards, or recommended best practices. A separate compliance team (second line of defence), led by the Chief Compliance Officer (CCO), manages the Companys regulatory compliance.
Reputation risk refers to the current or prospective risk to earnings and capital arising from adverse perceptions of the institutions image by customers, counterparties, shareholders, investors and/or regulators. Aadhar conducts business from multiple locations, employing hundreds of employees, and focussing on the low-income housing finance segment in the country. Hence, the Company is committed to delivering superior customer service, strengthening its grievance redressal mechanism, and improving its ESG practices. The Company has also recognised this as a material risk in its ICAAP Policy.
Technology risk refers to the potential for technology failures to disrupt business operations, such as information security incidents or service outages. It also involves management technology infrastructure failure that could compromise cybersecurity and business intelligence. To this end, the Company has established a Board-approved IT Policy with defined a governance structure, processes and controls required to be maintained in relation to IT systems.
Information Security and Cybersecurity
The organisation has proactively identified key information-related security risks and implemented targeted mitigation strategies to enhance its security posture:
There has been a notable increase in worldwide phishing, ransomware, Distributed Denial-of-Service (DDoS) attacks,
and Advanced Persistent Threats (APTs), especially those targeting financial assets and customer data.
Mitigation Measures: Deployment of next-generation firewalls, integration of threat intelligence feeds, 24/7 Security Operations Centre (SOC) monitoring, and regular penetration testing.
The growing reliance on vendors and cloud services has introduced vulnerabilities across the supply chain.
Mitigation Measures: Enforcement of third-party risk assessments, incorporation of security Service Level Agreements (SLAs) into contracts, and periodic monitoring of vendor security practices.
Risks related to unauthorised access or negligent behaviour by internal employees or contractors remain a concern for information security in financial organisations.
Mitigation Measures: Implementation of Data Loss Prevention (DLP) tools, Privileged Access Management (PAM), and delivery of insider threat awareness training programmes.
There is a continuous risk of non-compliance with evolving financial regulations.
Mitigation Measures: Regular compliance audits and ongoing updates to policies and procedures in alignment with global regulatory standards.
The potential loss of sensitive customer or financial data due to system misconfigurations or external breaches poses a critical risk.
Mitigation Measures: Use of encryption (both at rest and in transit), data tokenisation, and comprehensive endpoint protection.
Outdated infrastructure and software components increase the organisations exposure to security vulnerabilities.
Mitigation Measures: Migration of critical services to modern cloud platforms equipped with built-in security capabilities.
Weak or reused credentials can lead to unauthorised access to critical systems and data.
Mitigation Measures: Enforced the use of Multi-Factor Authentication (MFA) and the introduction of password less authentication mechanisms for high-risk systems.
- Transition to a Zero-Trust model to reduce implicit trust across systems.
- Implement micro-segmentation throughout the network.
- Enforce least-privilege access controls with continuous authentication.
B) Employee Awareness and Training
- Strengthen the human firewall.
- Conduct periodic phishing simulations.
- Launch gamified cybersecurity awareness programmes.
- Improve detection and response speed and accuracy.
- Automate threat response via Security Orchestration, Automation, and Response platforms.
- Conduct regular blue team exercises.
D) Data Governance and Protection
- Reinforce data classification, governance, and lifecycle management.
- Enhance classification tools and automated retention and deletion workflows.
- Align with NIST and ISO 27001 frameworks.
Over the last few years, Aadhar has significantly enhanced its cybersecurity posture by adopting proactive defences, enforcing rigorous policies, and aligning with global standards. As cyber threats continue to evolve, the Company remains committed to staying ahead through innovation, strategic investments, and continuous education.
The Company defines market risk as the risk of valuation loss or reduction in expected earnings stemming from adverse fluctuations in interest rates and credit spreads.
Liquidity risk is the risk of incurring losses due to an inability to meet payment obligations promptly when they fall due.
Aadhar has established a framework for managing liquidity and interest rate-related risks, as outlined in its Asset-Liability Management (ALM) Policy, which includes:
a) Structural Liquidity Statement
b) Liquidity Coverage Ratio (LCR) and Stock-Based Approach
c) Dynamic Liquidity Report
The Company has a Board-approved Investment, Interest Rate and Resource Planning Policy to limit exposure and plan funding by taking into consideration the associated pricing. In addition, it has implemented a robust mechanism to comprehensively track cash flow mismatches under both normal and stressed conditions, along with critical ratios.
The Company is committed to building a strong and lasting connection with its customers by combining localised outreach initiatives with digital engagement strategies. Recognising the diversity of its customer base, Aadhar undertakes a range of grassroots marketing efforts to ensure deep penetration and brand relevance across urban, semi-urban, and rural markets.
On-ground activities include branding of Direct Selling Agents (DSAs) and Aadhar Mitras, use of wall paintings, local advertising, and branded signage boards to increase visibility in key geographies. These efforts are complemented by the distribution of branded merchandise to sales teams and partners, reinforcing brand presence at every customer touchpoint and strengthening recall value.
In the digital space, the Company actively utilises its social media platforms to engage with both potential and existing customers. Through timely posts and updates, the Company promotes its product offerings, shares useful financial information, and communicates new initiatives in a cost-efficient and interactive manner. Its official website and call centre play a key role in lead generation and business sourcing, offering a seamless experience for users seeking housing finance solutions.
Additionally, the Company invests in public relations (PR) to further broaden awareness among stakeholders and the public. These multi-channel initiatives help the Company maintain a strong brand identity, enhance its credibility in the market, and foster trust with its target audience.
Through this integrated marketing approach, balancing local presence with digital reach, the Company continues to build a meaningful, trusted brand that resonates across all segments of its growing customer base.
Outdoor Marketing Activities During the Year
• Conducted 72 PMAY Spot Sanction Camps, generating over 1,700 hot leads.
• Organised 293 PMAY Home Loan Utsav events, resulting in more than 2,100 hot leads.
• Held 13 additional Spot Sanction Activities, yielding over 440 hot leads.
• Executed 12,026 Aadhar Parichay and 8,365 Leaflet Distribution drives, collectively generating over 33,000 hot leads.
• Facilitated 6,447 CSC (Common Service Centre) activities, contributing more than 13,250 hot leads.
• Completed wall painting campaigns at 619 locations, covering a total area of 8,06,600 sq. ft.
• Launched a Jio Store campaign across 160 outlets in Gujarat and Karnataka.
• Rolled out the Aadhar-CIDCO OOH (Out-of-Home) campaign at 25 key locations in Mumbai.
• Conducted festive branding campaigns in Maharashtra and West Bengal during Ganesh Chaturthi and Durga Puja.
• Participated in the Red FM Loan Carnival, generating 30 qualified leads.
Information Technology: Enabling a Digital Future
Aadhar has evolved into a truly digital-first lending organisation, embedding technology into every aspect of its operations. The Companys commitment to digital transformation has redefined how it serves its customers and enhanced operational efficiency. It also helps ensure regulatory compliance. By using advanced solutions, Aadhar has built a scalable, secure, and customer-centric ecosystem, ranging from an advanced loan management platform to mobility solutions and automation-driven efficiencies. This technology-driven approach fuels business growth and delivers seamless, innovative, and hassle-free financial experiences to the Companys customers.
Scalable Lending Platform: Powering Growth with Agility
In a rapidly evolving financial ecosystem, scalability and efficiency are key to sustained growth. Over the past four years, Aadhar has significantly strengthened its technology infrastructure by deploying a cloud-based data centre and launching the TCS Lending and Securitisation Platform. This robust and scalable core system seamlessly integrates with third-party ecosystems, ensuring smooth digital lending operations.
With a data-driven approach, the Companys lending platform facilitates:
• Seamless customer onboarding and loan application processing.
• Real-time credit underwriting using cognitive rule-based policies.
• Automated fraud and risk control mechanisms.
• Efficient loan disbursal, repayment scheduling, and NPA tracking.
• Real-time integration with agencies like CIBIL, CRIF, CERSAI, and PMAY.
• Digital collections management and real-time account allocation for agents.
These enhancements have streamlined Aadhars loan lifecycle, reduced turnaround time and costs, and ensured compliance.
Mobility Initiatives: Redefining Digital Experience
Recognising the need for accessibility and efficiency, the Company has placed mobility technology at the forefront of its digital strategy. Its mobility solutions empower both customers and employees with anytime, anywhere access to critical services. Key mobile initiatives include:
• Sales Mobility App: Facilitating 100% paperless customer onboarding.
• Collections (Debt Management) App: Enabling field agents to collect payments electronically with real-time e-receipting.
• Customer App (Available in English and Hindi): Providing secure account access, digital onboarding, and seamless CRM integration for raising service requests.
• All-in-One Employee App: Streamlining internal workflows and approvals.
• Field Technical Scrutiny App: Digitising site inspections and assessments.
• Personalised Digital Welcome Kit: Enhancing customer engagement from the start.
These mobility solutions and various services at the fingertips have significantly increased customer satisfaction and operational efficiency, while ensuring compliance adherence, leading to cost savings and improved service delivery.
Process Automation: Driving Operational Excellence
Automation has been a key pillar of Aadhars digital transformation strategy, enabling efficiency, accuracy, and scalability. The Company has proactively implemented automation to optimise critical business operations, reducing manual intervention and enhancing process efficiency.
Key automation initiatives include:
• Automated KYC verification
• Automated bureau verification
• Automated EPFO verification
• Bank statement analyser for enhanced loan decisioning
• E-stamping and e-signing for digital loan execution
One of the Companys key enablers in automation has been Robotic Process Automation (RPA), used by Aadhar to streamline repetitive, rule-based tasks. With over 30 automated processes, the Company has successfully saved 1,000+ person-days, allowing its workforce to focus on high-value activities. By embracing RPA, the Company has minimised errors, improved processing speed, and strengthened compliance, setting the stage for a more agile and efficient operational framework.
In-House Fintech Capabilities: Deploying Tailored Digital Solutions
Understanding the dynamic nature of its business, Aadhar has invested in developing bespoke digital solutions in-house. More than 15 digital modules have been created to enhance customer experience, regulatory compliance, and operational efficiencies. Some of the key initiatives include:
• Customer DIY/Web Portal for self-service.
• Partner Portal to streamline channel partner onboarding and servicing.
• Digital Vendor Onboarding for seamless vendor management.
• Digital Lead Generation through integration with various fintech partners to improve customer acquisition.
Additionally, Aadhars centralised payment platform has simplified online collections, making digital transactions more accessible to customers.
Robust IT Infrastructure: Ensuring Reliability and Security
A strong IT infrastructure is essential to support business continuity and secure operations. The Company has established a dedicated IT infrastructure, with a primary data centre in Mumbai, and a disaster recovery (DR) centre in Hyderabad. Aadhars major branches are equipped with an SD-WAN network, ensuring:
• AI-enabled granular monitoring.
• Firewall protection and intrusion detection.
• Advanced malware protection and web content filtering.
Additionally, the Companys automated server load balancing mechanism ensures high uptime, improving customer service and business operations.
Information Security: Implementing a Layered Approach to Protection
Security is a core aspect of Aadhars IT strategy. The Company follows a layered security architecture to safeguard customer data and financial transactions. Key initiatives include:
• Endpoint protection with EDR New Generation Anti-Virus solutions and BitLocker encryption.
• Annual vulnerability assessments and penetration testing.
• SSL certification updates for secure website access.
• Web Application Firewall (WAF) to mitigate cyber threats.
• Email security with BIMI to prevent phishing attacks.
• Automated regulatory compliance reporting through compliance software.
Furthermore, the Company has established the Aadhar Data Vault for secure number storage, safeguarding customer privacy and ensuring compliance with government regulations and legal requirements.
Driving the Future with Innovation
As Aadhar continues to grow, its focus remains on using technology to create seamless, secure, and customer-centric financial experiences. The Companys investments in AI-driven analytics, automation, mobility, and fintech capabilities puts it at the forefront of digital transformation in the housing finance sector.
By continuously innovating and optimising its IT ecosystem, Aadhar is enhancing its business efficiency and empowering its customers with greater control and convenience in their financial journey. Moreover, the Companys technology-led objective is paving the way for a future-ready, scalable, and customer-first organisation.
The Company has embraced a data-driven strategy, led by a dedicated Chief Data Officer (CDO) and a skilled data science team. This approach enables efficient scaling, sharper decision-making, and better business outcomes through advanced analytics, artificial intelligence (AI), and machine learning (ML).
The centralised data science team includes data engineers, data scientists, and experts in visualisation and discovery. Together, they help optimise key business processes. The team collaborates with risk, collections, and operations teams to integrate data intelligence into the Companys strategic framework.
This system enables the Company to standardise data, establish a single source of truth, and create a cloud-ready infrastructure for efficient analytics. By embedding generative AI, data governance, and security protocols into every layer of its analytics stack, Aadhar ensures compliance, builds trust, and drives agile, informed decision-making across the enterprise.
Key focus areas of the Companys data science team include:
• Strengthening asset quality through advanced risk analytics to support more accurate and data-backed credit underwriting decisions.
• Conducting collections analytics to identify high-risk customer cohorts early, enabling timely interventions to mitigate defaults.
• Automating risk-based pricing models to refine credit risk evaluation, improve approval rates, and optimise pricing strategies, ultimately enhancing profitability and yield.
• Aligning branch expansion strategies with data insights, ensuring that new locations are selected based on analytical forecasts and performance potential.
Through these initiatives, the Company aims to deeply integrate data analytics into its business model. The use of predictive modelling and AI not only enhances risk management but also contributes to operational efficiency, strategic planning, and a more agile and responsive decision-making process. By continuing to evolve its analytics capabilities, the Company is well-positioned to stay ahead in a dynamic and competitive lending environment, using data as a powerful asset for growth and sustainability.
The Internal Audit team has developed a customised branch audit dashboard with the help of the Data Science Team wherein data analysis 2 types of functions of branch audits have been automated:
• Daily Cash Register (DCR) and Cash Management System (CMS) have been automated. The Internal Audit Department uploads the file in the required format on the Data Science portal, and the report is generated along with detailed analysis for the amount deposited, TAT, and the name of the person depositing the amount. This functionality has reduced the manual effort required by auditors to analyse cases where the amount is not deposited, is short deposited, or where TAT is violated.
Internal Audit Software- Pentana
The launch of our audit management software, Pentana - AHFL Audit Application, has simplified the auditing process. Audits are now conducted using this software, which enables us to raise observations and monitor actionables through the system. It also serves as a central repository for gathering and preserving observations and evidence.
ESG & Environment Responsibility
As part of its ongoing commitment to sustainable development and environmentally responsible construction, the Company continued to advance the Green Building Certification initiative during the financial year 2024-25. This programmes encourages builders and developers to adopt eco-friendly construction practices and obtain recognised green building certifications.
Under this initiative, Branch Technical Managers (BTMs) play a crucial role in identifying eligible projects and guiding developers through the certification process. The objective is to not only enhance the environmental compliance of financed projects but also align with broader national and global green finance trends.
• A total of 70 projects were certified under the Green Building initiative during 2024-25.
• Karnataka (KTK) led the initiative with 44 certified projects, demonstrating strong regional adoption of sustainable construction practices.
• Regions such as Rajasthan, Gujarat, and Tamil Nadu also recorded active participation in the programmes.
This initiative continues to support the Companys broader ESG (Environmental, Social, and Governance) objectives and contributes to the long-term sustainability and resilience of its lending portfolio.
At Aadhar, employees are not just part of the businessthey are the business. Every success, every milestone, and every celebration is driven by their passion, commitment, and aspirations. This people-first culture is not merely a philosophy; it is the foundation of everything the Company does.
The Company is proud to have earned the Great Place to Work? Certification for the sixth consecutive year, and to once again be named among Indias Top 50 Best Workplaces in Health & Wellness 2024. These recognitions are not just accoladesthey reflect the Companys continued commitment to creating a workplace where people feel safe, supported, and inspired to grow.
Over the past year, the Company has prioritised ensuring every employee feels seen and valued. Through its flagship recognition platform,Aadhar Sammaan, over 1,000 high-performing individuals were recognised for their contributions. The Long Service Awards celebrated 175 employees who have been part of the journey for five to twenty yearsa testament to the enduring relationships the Company has nurtured.
At Aadhar, work is not just about performanceit is about shared experience. From celebrating festivals like Diwali, Navratri, Eid, and Christmas to commemorating national days with pride, the Companys offices across India reflect a vibrant spirit of unity and cultural celebration.
The Company has continued to invest in employee well-being through a variety of initiatives, including sports tournaments, health check-ups, and expert-led wellness sessions. Regular townhalls, under the banner of Seedhi Baat Aadhar Ke Saath, have enabled the leadership to engage directly with employees, fostering transparency, trust, and open communication.
Internal career growth remains a core focus. Over 100 roles were filled through Internal Job Placement (IJP) programs, and 85% of apprentices from key functions such as Credit, Operations, and Technical transitioned into full-time positions. The UDAAN programme has further accelerated the careers of high-potential talent.
Learning and leadership development continue to be central to the Companys strategy. The iLEAD programme, in collaboration with NMIMS, equips first-time managers with leadership skills, while the LEADD programme focusses on strengthening the capabilities of branch managers through real-world business and behavioural training. With an average of 2.10 training days per employee, a culture of continuous learning is deeply embedded within the Company.
At Aadhar everything is built on a simple belief: when the Company takes care of its people, everything else falls into place. The Company is not just building a workplaceit is cultivating a thriving community where every individual is respected, empowered, and inspired to grow.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) remains a strategic priority for Aadhar, closely aligned with its aim of promoting inclusive and sustainable development. Far from being a supplementary effort, CSR is embedded into the Companys business philosophy, reflecting a strong commitment to ethical conduct, social responsibility, and stakeholder engagement. Rooted in the principles of sustainability, accountability, and transparency, Aadhars CSR strategy focusses on tackling key developmental challenges through structured, impact-oriented initiatives.
Aadhars CSR framework emphasises long-term value creation over short-term relief, seeking to empower communities through initiatives that are scalable, sustainable, and responsive to evolving social needs. Key thematic areas, including healthcare, education and skill development, environmental conservation, and sports promotion, are selected based on their potential to deliver measurable, lasting outcomes. Furthermore, the Company places significant importance on stakeholder accountability, ensuring every programme is monitored, evaluated, and aligned with defined social objectives and regulatory requirements.
In recent years, Aadhars CSR initiatives have grown in both scale and impact, reaching varied communities across several states and regions. The Company has introduced programmes focussed on
healthcare access, education, skill development, environmental restoration, and sports development, each carefully designed to deliver tangible benefits for targeted communities. These efforts aim to promote social equity, improve livelihoods, increase access to essential services, and encourage environmental responsibility. Together, they support the holistic development of communities.
Employee involvement builds a culture of volunteerism and social responsibility within the organisation. By engaging employees directly, the Company deepens its connection with the communities it serves and promotes a sense of shared responsibility. Through these CSR efforts, Aadhar also supports national development goals, reflecting its commitment to act as a responsible and socially aware corporate entity.
The Company has built a strong internal control framework aligned with its scale, complexity, and regulatory environment. This framework rests on a culture of integrity, ethics, and accountability, ensuring adherence to high standards of corporate governance. It supports compliance with regulations, protects assets, prevents fraud and errors, and ensures accurate financial reporting. It also enables timely preparation of reliable financial statements, fostering transparency and informed decision-making.
The framework is supported by a combination of in-house audit mechanisms and external independent auditors. In addition to the dedicated internal audit team, the Company engages a professional audit firm to conduct regular internal and process audits. These assessments verify adherence to established control policies and identify areas for operational improvement. The Company also deploys monitoring tools, transaction tracking systems, data backup protocols, and contingency plans to safeguard business continuity and resilience.
Audit Committee meetings are held at regular intervals to review internal audit findings and initiate corrective actions where necessary. These meetings play a key role in strengthening the risk management framework, enforcing accountability, and enhancing internal control practices across the organisation.
It is important to note that past performance is not necessarily indicative of future results. Certain statements in this Management Discussion and Analysis (MD&A) may constitute forward-looking statements within the meaning of applicable securities laws and regulations. These statements reflect the Companys current beliefs, expectations, and intentions regarding future events, actions, or developments. Forward-looking statements are generally identified by words such as believe, plan, anticipate, continue, estimate, expect, may, will, and similar expressions. They may also include underlying assumptions or bases for such statements. Actual results may differ materially from those expressed or implied due to a variety of internal and external factors beyond the Companys control. The Company undertakes no obligation to update, revise, or amend any forward-looking statements in this MD&A following its publication, whether as a result of new information, future events, or otherwise.
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