Ind Bank Housing Ltd Management Discussions

1 HOUSING FINANCE SECTOR OVERVIEW AND OUTLOOK

The Indian housing finance sector for FY 2024-25 witnessed continued robust growth, driven by strong housing demand, government initiatives, improving affordability (especially with anticipated interest rate cuts), and increasing urbanization. Housing Finance Companies (HFCs), regulated by the National Housing Bank (NHB) under the oversight of the Reserve Bank of India (RBI), play a crucial role in providing credit to this sector.

The role of Government in enhancing housing supply is a critical factor that affects the availability and affordability of homes and there has been a shift from being provider to being the facilitator of housing. The housing sector is growing due to government initiatives, stable interest rates, and technology integration. Housing demand in Tier-II and Tier-III cities is driven by affordability and infrastructure development. The growth in housing finance is supported by Banks and Housing Finance Companies.

The Government launched a Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund II, This Fund will be established as a blended finance facility with contribution from the government, banks, and private investors. The fund will aim at completion of 100,000 housing units.

The Government of India is committed to reduce emission in the residential construction sector. The Housing Finance Companies are also in object to reduce emission in the construction sector, which is one of the biggest consumers of energy (40 per cent) and green-house gas emission (33 per cent). Green buildings market in India is currently at a nascent stage of development, with only 5 per cent buildings being classified as green. It is essential to take green label to residential housing, more particularly to affordable housing segment and beyond the metros to the Tier II, III cities.

2. BUSINESS OPERATIONS

The Company had suspended fresh lending business since 2000 and had been engaged in recovery of loans outstanding. The companys net loss for the FY 2024-25 is Rs. Rs.30.71. The Company started various initiatives to restart its lending operations. The Companys Board appointed Merchant bankers/Professional Advisors for suggesting various options available to the Company for enhancement of housing finance business through organic/inorganic means and to reach minimum net owned funds to restart operations. RBI vide order dated 21.09.2023 has cancelled the Certificate of Registration of the Company. The Company is in the process of shedding unprofitable loans through distressed asset sales and write-offs, shoring up liquidity, and slashing debt.

3. RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS

The major risks among others that your company manages include credit risk, liquidity risk, interest rate risk and operational risk. As there was no fresh lending, the credit risks on appraisal and disbursement did not arise. The company has put in place an aggressive recovery mechanism for realization of existing housing loans, including continuous follow up of legal process for speeding up the recovery process. Your company continuously monitors the recovery of the loans and funds requirement and hence the liquidity risk is minimized. Your company has detailed operating manuals and well laid down delegation of powers to ensure that operational controls are maintained on the business. The policies and procedures are adopted as per the guidelines of Reserve Bank of India after placing the same to the Board. Your company also has an adequate internal control system to ensure feedback on adherence to the defined policies and procedures.

4. HUMAN RESOURCES

Human resources of your company consisted of one Company Secretary and another deputed from the parent organization. The employees are qualified and experienced in their respective field of operations.

5. FINANCIAL PERFORMANCE

The Equity of your company comprises one Crore equity shares of Rs.10 each. Your companys shares are listed with the Bombay Stock Exchange Ltd.

Financial Liabilities Borrowings

Borrowings comprise of term loan borrowed from Indian Bank. The Loan is obtained from Indian Bank at market rate of interest. As per agreement entered into with Indian Bank no interest was charged since 01.04.2017.

Other Financial Liabilities-

Other Financial Liabilities comprise of amount received under the auction sale held under the provisions of SARFAESI Act and Amount received from various branches during merger of branches and Overdue deposit. Your company had stopped accepting fresh deposits from public since 1998 and renewal of the deposits from 01.11.2001. Your company has repaid all the matured deposits except a sum of Rs. 6.33 lakhs as on 31.03.2025, which represent the deposits matured but withheld by Central Bureau of Investigation, Anti-corruption Branch, Madurai pending disposal of their case.

Non Financial liabilities

Non Financial liabilities comprises of provisions made for March 2025 quarter and statutory dues for the month of March 2025. Financial Assets

Financial Assets comprises of Cash, Bank Balance, Investment and Other Financial assets.

Investments: The investments of your company mainly comprise of statutory liquid assets kept in Govt. Securities and recoveries kept in fixed deposits with Indian Bank.

Non Financial Assets

Non Financial Assets comprises of Current tax assets and Property, Plant and Equipment.

Current tax assets comprises of TDS and advance tax net of provision. Other Non Financial assets comprises of Balance with govt authorities.

Property, Plant and Equipment: The Property, Plant and Equipment comprise of furniture, office equipment and computers. Your company has disposed of old and unused fixed assets. There is no addition to the Fixed Assets inventory during the year.

Statement of Profit and Loss

During the year the company incurred a loss of Rs. 30.71 lakhs. After adjusting the loss with the accumulated losses carried over the same at the end of the 31.03.2025 stood at Rs. 13670.59 lakhs as against RS. 13639.88 lakhs for the previous year.

Income

The gross income during the year 2024-25 Rs.27.65 Iakhs as against Rs.30.13 lakhs in 2023-24, the previous year.

Expenses

Employee expenses increased to Rs.30.66 Iakhs in 2024-25 from Rs.25.74 lakhs in 2023-24. The administrative and other expenses are at Rs. 27.61 lakhs in 2024-25 as against Rs.73.35 lakhs in 2023-2024 in the previous year. Your company has charged depreciation of Rs 0.09 lakhs for 2024-25 against Rs 0.09 lakhs for the previous year.

Significant Changes in Keyfinancial ratios:

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore, including:

6. OUTLOOK

RBI vide order dated 21.09.2023 cancelled the Certificate of Registration of the Company. RBI however permitted the Company to recover the loan outstanding from the borrower We are concentrating on recovery of the loan outstanding .