India Shelter Finance Corporation, a prominent player in the affordable housing finance sector, has reported robust growth in its Assets Under Management (AUM) for Q2, despite facing industry-wide challenges. The company's strategic focus on Tier-2 and Tier-3 cities, coupled with its emphasis on self-employed customers in the affordable housing segment, has contributed to its strong performance.

Key Financial Highlights

• AUM Growth: The company's AUM reached Rs. 9,252.00 crores, marking a significant 31% year-on-year growth.
• Disbursements: Q2 saw disbursements of Rs. 931.00 crores, representing a 12% growth.
• Network Expansion: 9 new branches were added, bringing the total to 299 branches.
• Profitability: Net profit increased by 35% year-on-year to Rs. 122.00 crores.
• Return on Equity: Stood at 17%.

Asset Quality and Financial Metrics

India Shelter Finance has maintained stable asset quality metrics, demonstrating resilience in a challenging environment:

Business Outlook and Strategy

The company has reiterated its guidance for the coming periods:

• Loan Growth: Targeting 30-35% growth
• Spreads: Aiming to maintain above 6%
• Credit Costs: Expected to be in the range of 40-50 basis points

Management noted some seasonal challenges in Q2, particularly due to rains and GST implementation delays. However, they expect improved momentum in the second half of the fiscal year.

Focus on Employee Retention

In a significant move to boost employee retention and align staff interests with the company's long-term goals, the Board has approved ESOP schemes for branch managers. This initiative is set to cover approximately 500 employees, potentially reducing attrition rates and enhancing operational stability.

Market Position and Competitive Edge

India Shelter Finance continues to leverage its strong presence in Tier-2 and Tier-3 cities, focusing on self-employed customers in the affordable housing segment. This strategic positioning has allowed the company to tap into a growing market while maintaining asset quality.

Funding and Liquidity

The company's funding profile remains robust:

• Cost of funds decreased by 10 basis points to 8.50%
• Management expects a further 20 basis points reduction by year-end
• Diversified borrowing from over 30 counterparties with an average tenure of about 8 years

Conclusion

India Shelter Finance Corporation's Q2 results demonstrate its ability to grow sustainably while navigating industry challenges. The company's focus on underserved markets, coupled with prudent risk management, positions it well for continued growth in the affordable housing finance sector. However, investors should remain vigilant of potential asset quality pressures and broader economic factors that could impact the sector.

As the company continues to expand its network and enhance its operational efficiencies, it appears well-positioned to capitalize on the growing demand for affordable housing finance in India's smaller cities and towns.

India Shelter Finance Corporation Limited has completed the allotment of 23,865 equity shares under its Employee Stock Option Schemes, marking another milestone in its employee incentivization strategy. The Stakeholders Relationship Committee approved this allotment through a circular resolution passed on January 08, 2026, pursuant to the exercise of vested Employee Stock Options under the company's ESOP schemes.

Share Allotment Details

The allotment has resulted in an increase in the company's paid-up share capital, demonstrating the active participation of employees in the equity ownership program.

Scheme-wise Breakdown

The allotment was executed under two separate ESOP schemes, with varying exercise prices reflecting different grant periods.

Previous ESOP Activity

This latest allotment follows the company's earlier announcement of granting 13,73,500 stock options to eligible employees under its ESOP 2025 scheme. The November 2025 grant, approved by the Nomination and Remuneration Committee, provided employees with options exercisable within 5 years and 3 months from the date of first vesting.

Regulatory Compliance and Listing

The allotment has been executed in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The newly allotted shares will rank pari-passu with existing equity shares, and the company is completing formalities for listing these shares on both NSE and BSE.

Financial Performance Context

The ESOP allotments come against the backdrop of strong financial performance by India Shelter Finance Corporation Limited:

The company's robust operational performance, with stable asset quality metrics of 1.20% Gross Stage 3 and 0.90% Net Stage 3, provides a solid foundation for its employee equity participation programs. With 4,276 employees as of Q2FY26, these ESOP schemes demonstrate the company's commitment to aligning employee interests with shareholder value creation in the growing housing finance sector.