### **Overview** Can Fin Homes Ltd. (CFHL), established in 1987 and headquartered in Bengaluru, is a leading housing finance company (HFC) promoted by Canara Bank. Operating under the motto of *"friendship finance,"* the company emphasizes transparency, compliance, and customer-centric service. CFHL specializes in affordable and mid-income housing finance, serving primarily salaried and professional first-time homebuyers. It is one of the few HFCs authorized to accept public deposits, adding to its diversified funding sources. --- ### **Core Business & Product Portfolio** CFHL’s operations are divided into **Housing Loan Products** and **Non-Housing Loan Products**, with housing loans constituting **86% of its AUM** (as of Jul 2025), down from 90% historically, indicating strategic diversification. #### **Housing Loan Products:** - Individual Housing Loan - Commercial Housing Loan - Composite Loan - Affordable Housing Loan - Rural & Urban Housing Loans #### **Non-Housing Loan Products:** - Loan Against Property (LAP) - Site Loans - Mortgage Loans - Builder Loans - Loans Against Rent Receivables - Personal Loans, Flexi LAP - I-Secure and Rooftop Solar Loans (Eco-friendly initiatives) The company targets both individual and non-individual borrowers, with **70% of its outstanding portfolio** made up of salaried customers, contributing to strong asset quality. --- ### **Market Position & Customer Focus** - **Primary Segment:** Affordable housing (sub-₹15 lakh) and mid-income homebuyers, especially first-time owners (avg. age: 35 years). - **Geographic Focus:** Expanding beyond historical concentration in South India into **Tier II and Tier III towns** across North, West, and East India to address underpenetrated markets. - **Growth Opportunity:** Leveraging government schemes like **Pradhan Mantri Awas Yojana (PMAY)**, state stamp duty concessions, and urbanization trends. --- ### **Financial Performance & Loan Book Growth (FY2024–FY25)** - **Total Loan Book:** Grew from **₹34,999 crore (Mar 2024)** to **₹38,217 crore (FY25)** – a YoY increase of ~9.2%. - **Loan Approvals:** Rose from ₹8,783 crore to ₹9,294 crore. - **Disbursements:** Increased from ₹8,177 crore to ₹8,568 crore. - **FY25 Disbursement Target:** Aiming for **₹12,000 crore**, reflecting confidence in expansion and digital momentum. The company expects **monthly disbursements to stabilize at ₹800–1,000 crore** in FY25, supported by new digital channels and 15 new branches. --- ### **Strategic Growth Initiatives (2024–2025)** #### **1. Geographic Expansion** - **Branch Network Growth:** Expanded from **219 (Jul 2024)** to **234 branches** in FY24–25. - **Recent Expansion:** Opened **29 new branches** in the last 6–9 months (14 in H1 FY25, 15 in Q3 FY25), primarily in **North and West India**. - **Planned Expansion:** Target to open **15 new branches annually** to deepen presence in Tier II towns like Bikaner, Ratlam, Ujjain, and Meerut. - **Goal:** Reduce Southern India’s dominance (historically ~71% of loan book) through diversification. #### **2. Shift from DSA to Direct Sales Channels** - Historically, **80% of business** came via **Direct Selling Agents (DSAs)**. - Launched a dedicated **in-house sales team**, growing from **37 to 100 members in one quarter (Jul 2025)**. - Direct sales contributed **5% of incremental business (Q3 FY25)**, up from 4%, showing early traction. - **Long-Term Goal:** Increase direct & digital contribution to **20%**, reducing DSA reliance from 80% to **60% by FY27**, unlocking cost savings. #### **3. Digital Transformation** - Partnered with fintech firms and technology providers to enhance customer experience and operational efficiency. - Deployed **core banking solutions** and **digital financial platforms** for seamless, real-time processing. - Automated **loan processing, document verification, and underwriting**, reducing turnaround time and human error. - Implemented **secure digital infrastructure** with strict protocols to prevent fraud and protect data. - **RFP Issued (Jan 2024):** To onboard a System Integrator for IT modernization. #### **4. Technological Process Improvements** - Centralized processing centers standardize credit decisions. - Real-time monitoring systems improve underwriting, disbursement, and collections. - Focus on **personalized customer journeys** for tech-savvy millennials and Gen Z. --- ### **Risk Management & Asset Quality** - **Strong NPA Control:** Reported historically low NPA levels (as low as **0.64% in FY22**), attributed to: - Conservative underwriting (only verified income documents accepted). - Focus on salaried borrowers (70–72% of portfolio). - Robust risk rating, credit scoring, and monitoring systems. - **Funding Strategy:** Leverages **Commercial Papers, bank borrowings, and NHB refinance** for lower funding costs; limits expensive NCDs. - **Cost-to-Income Ratio:** Expected to stabilize at **~18% by end of FY25**, down from 22%+ a decade ago. --- ### **Interest Rate Sensitivity & Pricing Strategy** - **Floating Rate Profile (as of Jul 2025):** - **31.77%** linked to **Repo Rate** - **49.71%** on **Special Rates** - **18.52%** tied to **Treasury Bill Rates** - **Zero exposure to MCLR** - This repo-rate alignment enables **quick transmission of RBI rate cuts**, helping maintain **NIM stability** and competitive customer pricing. --- ### **Sustainability & Future-Oriented Initiatives** - **Eco-Friendly Operations:** Implemented solar UPS and LED lighting in select branches; plans for nationwide rollout. - **Green Housing Product:** Development underway to promote sustainable homes (announced Aug 2023). - **Rooftop Solar Loans** introduced to support renewable energy adoption. --- ### **Challenges & Competitive Landscape** - **Intense Competition:** In Tier I and Tier II cities from private banks, NBFCs, and Big Tech players. - **Higher Interest Rates:** CFHL’s rates are **slightly above commercial banks**, a competitive disadvantage. - **Supply Constraints:** In affordable housing (below ₹15 lakh), growth is dependent on **infrastructure development and government incentives**. - **Macro Risks:** Pandemic aftermath, real estate volatility, and economic uncertainty. --- ### **Strategic Vision: The 3Rs Framework** (Reinforce, Rebuild, Reach Higher) - **Reinforce:** Strengthen digital, operational, and credit capabilities. - **Rebuild:** Expand geographic and product footprint. - **Reach Higher:** Target ₹1 lakh crore loan book from current ₹38,217 crore with **18–20% annual growth** expected (FY24 outlook). - **Leverage Ratio:** Currently at **7.97x**, well below regulatory cap of **12x**, allowing room for debt-funded expansion. --- ### **Key Financial & Operational Metrics (as of Latest Data)** | Metric | Value | |-------|-------| | **Total Loan Book (FY25)** | ₹38,217 Crore | | **Branch Network** | 234 Branches (Across 21 States) | | **Affordable Housing Loan Centers** | 18 | | **Avg. Housing Loan Size** | ₹24 Lakh (New Loans) | | **Blended Avg. Ticket Size** | ₹25 Lakh (expected to grow to ₹27 Lakh) | | **Employee Strength (Branch Level)** | ~800–850 | | **Sales Team Size** | 100 (Direct Sales) | | **Cost-to-Income Ratio (Target)** | ~18% | | **Debt-to-Equity Ratio** | 7.97x | | **Dividend History** | Uninterrupted since listing (1991) |