Dear Shareholders,

The last few months have witnessed unexpected and unprecedented changes in the way we live and work owing to the Covid-19 pandemic. It has impacted societies and economies at their core. While the tough times are inevitable, I believe that the crisis is an opportunity in disguise and as the old saying goes should not be wasted.

Your company emerged stronger with our robust business model, tech-enabled processes, a differentiated asset portfolio and talented workforce. Our unwavering focus remained on keeping our employees and the communities that we operate in, safe and healthy. Through our responsible growth strategy, we continuously created opportunities for the underserved customers by fulfilling their dreams and nurturing them every step of the way.

The financial year 2019-20 was a period of turbulence. Subdued macroeconomic environment, financial sector liquidity crunch and slowdown in the infrastructure segment impacted the overall growth outlook. In addition, the lockdown disrupted economic activities across the country. The Government and the Reserve Bank of India (RBI) intervened to contain the economic impact of the virus by taking significant steps. Government announced immediate support for farmers, construction workers and migrant labourers—most impacted by the economic standstill. The RBI announced measures such as liquidity infusion through cash-reserve ratio cut, targeted long-term repo auction and more importantly allowing a three-month moratorium on all-term loans and working capital, later extended to six months.

On a positive side, farm sector emerged stronger on the back of robust output and prices. As per World Bank’s Ease of Doing Business 2020 Report, India moved up by 14 positions to 63rd ranking in 2019, enhancing the country’s competitiveness globally.

In real estate sector, lockdown impacted construction activities and disrupted sales. Liquidity tightness and lockdown affected loan disbursement and collections in the housing finance sector. However, Government’s announcements like National Housing Bank (NHB) raising liquidity for Housing Finance Companies and approval of ₹ 25,000-crore alternate fund have all been a positive. Special focus on the housing sector in the Budget 2020 will ensure demand recovery in the housing finance sector. The Government’s continued impetus on ‘Housing for All’ mission under the Pradhan Mantri Awas Yojana (PMAY) along with the subsidy benefits will make home loans more affordable for customers across the social spectrum.

Your organisation’s philosophy is anchored around the vision of ‘Complete Profitability’ and Environmental, Social and Governance (ESG) framework with increased focus on sustainable growth. During the year, IIFL Home Finance continued its journey of providing home loans to the lower income segments of the society and help realise their biggest dream. Our robust systems and processes backed by sound governance, ethical and transparent practices and risk management resulted in superior asset quality. During the year 2019-20, our total revenue and net profit stood at ₹ 17,752 million and ₹ 2,449 million respectively. We effectively served our growing base of customers across length and breadth of the country by leveraging 2,377 touch points of the IIFL Group.

Driving financial inclusion has been in our DNA since our inception. Our key loan offerings, Swaraj Loan, help us fulfill the needs of the marginalised section in the best possible manner. We actively collaborated with various State Governments and State Housing Authorities in order to promote affordable housing. We helped empower over 38,300 customers with more than ₹ 9+ billion subsidy as on March 31, 2020, under the Pradhan Mantri Awas Yojana – Credit Linked Subsidy Scheme (PMAY-CLSS).

Today, your company has digital capabilities that can transform experiences; improve connectivity and knowledge sharing. Our advanced technology adoption made ‘Work from Home’ a ‘New Normal’ during the lockdown. We successfully automated the credit underwriting process on the basis of analytics driven tools. With 'Jhatpat' app, the loan sanction process has been made much faster and easier. Our seamless on-boarding process and efficient end-to-end loan disbursement mechanism has enabled us to provide delightful and convenient customer service.

We endeavour to provide relevant skill development opportunities to our talent pool and have made continuous efforts to build an inclusive culture. Our responsive, industry focused, customer-centric workforce makes us deliver better offerings and customer satisfaction.

We supported Government’s ‘Angikaar’ campaign for bringing social behaviour change for beneficiaries of completed homes under PMAY (U).

The Company supported affordable Green buildings structures through its initiative ‘KUTUMB’. During the year, we introduced ‘Green Value Partner’ program to enable developers obtain a Green Building Certification. We always aim to operate responsibly and conduct business in a socially responsible manner. Our thoughts remained with the communities and individuals deeply hit by the Covid-19 outbreak. For migrant labourers at construction sites, we took an initiative by educating them on the precautionary measures and providing essentials and relief kits.

Looking ahead, we will continue to work towards enabling access to affordable credit to our customers by further enhancing our strengths and adopting newer digital platforms. As I conclude, I express my sincere gratitude to our shareholders, bankers, customers, Board of Directors and our committed employees. These are challenging and uncertain times, but we are confident that we can get through this together.

Yours sincerely,

S. Sridhar