MAS Financial Services Limited (MFSL) has strengthened its position in the housing finance sector by increasing its stake in its subsidiary, MAS Rural Housing and Mortgage Finance Limited (MRHMFL). The move comes as part of MFSL's strategic expansion in the growing housing finance market, particularly targeting the middle-income segment.

Share Conversion Boosts Ownership

MFSL acquired 333,333 equity shares of MRHMFL through the conversion of optionally convertible preference shares (OCPS). This transaction has resulted in an increase of MFSL's stake in MRHMFL from 62.02% to 62.54%. The Finance Committee of MRHMFL approved the allotment of these equity shares at Rs. 100.00 per share on September 12, 2025.

MRHMFL: A Growing Housing Finance Player

MRHMFL, a housing finance company registered with the National Housing Bank, focuses on serving the middle-income segment of society. This demographic is considered one of the key drivers of the housing industry, characterized by informal yet creditworthy individuals.

The subsidiary has demonstrated consistent growth over the past few years:

For the quarter ended June 30, 2025, MRHMFL reported a turnover of Rs. 23.00 crores and a net profit of Rs. 2.76 crores, indicating continued positive performance.

Strategic Implications

The increased stake in MRHMFL aligns with MFSL's strategy to strengthen its presence in the housing finance sector. By consolidating its control over MRHMFL, MFSL is well-positioned to capitalize on the growing demand for housing finance in semi-urban and rural areas.

Regulatory Compliance

The share conversion and subsequent increase in stake were carried out in compliance with SEBI regulations. MFSL has duly informed the BSE Limited and the National Stock Exchange of India Limited about this development, adhering to the disclosure requirements under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

As the housing finance sector continues to evolve, particularly in serving the middle-income segment, MFSL's increased stake in MRHMFL could prove to be a strategic move in capturing a larger market share and driving future growth.

MAS Financial Services Limited (MASFIN) has reported a robust 20.43% year-on-year growth in Assets Under Management (AUM) for Q1, reaching INR 12,505.00 crore. The company also successfully raised INR 200.00 crore through the allotment of non-convertible debentures (NCDs), demonstrating its strong position in the market.

Financial Performance Highlights

• Total income grew by 28% to INR 444.00 crore
• Profit after tax increased by 19% to INR 84.00 crore
• Maintained a healthy asset quality with Gross Stage 3 Assets at 2.49% and Net Stage 3 Assets at 1.63%

Business Segment Performance

MASFIN's core MSME segment, comprising microenterprise loans (MEL) and SME loans, continued to be the primary growth driver:

NCD Issuance Details

MASFIN successfully raised INR 200.00 crore through the allotment of 20,000 non-convertible debentures:

• Face value: INR 1,00,000 per debenture
• Interest rate: 9.75% per annum, payable annually
• Tenure: 1 year, 10 months, and 16 days (maturing on June 15, 2027)
• Security: First ranking charge over the company's book debts and loan receivables
• Rating: 'CARE AA-; Stable' by CARE Ratings Limited

Management Commentary

Kamlesh Gandhi, Chairman and Managing Director, commented on the company's performance: "We are well-positioned for growth, with a strong foundation built over 30 years. Our focus remains on maintaining asset quality and profitability while expanding our retail infrastructure."

Future Outlook

• The company aims to increase its retail distribution to 70-75% of total business over the next 6-12 quarters
• MASFIN expects to maintain Net Interest Margins between 7-8% and Return on Assets between 2.75-3%
• The management anticipates a reduction in borrowing costs by 25-35 basis points during the year
• The company plans to expand its branch network, focusing on deeper penetration in existing geographies

MAS Financial Services continues to demonstrate resilience and consistent growth, leveraging its strong market position in the MSME lending segment. With a robust capital position and diversified funding sources, the company is well-equipped to capitalize on future growth opportunities in the financial services sector.