Can Fin Homes Limited: history, ownership, mission, how it works & makes money

A Brief History of Can Fin Homes Limited

Founded in 1987, Can Fin Homes Limited is a prominent finance company based in India that specializes in providing housing finance solutions. The company is headquartered in Bangalore and operates in various segments of the housing finance industry.

Can Fin Homes was established as a subsidiary of Canara Bank, one of India’s leading public sector banks. Initially, the company started its operations with a modest capital base of ₹20 million. Over the years, it has grown significantly, accessing both retail and institutional markets for funds.

By 1991, Can Fin Homes received its registration from the National Housing Bank (NHB) under the Housing Finance Companies (NHB) Directions, 1989, which marked its entry into the regulated housing finance sector.

In the financial year 2000-01, Can Fin Homes reported a profit after tax of ₹80 million, showcasing its potential in the competitive housing finance market. The company continued to expand its footprint and diversified its products to include home loans, construction loans, and loans against property. By 2010, Can Fin Homes had established over 100 branches across India.

The company marked a significant milestone in 2018 by achieving a loan book size of over ₹1,000 crore, reflecting a robust growth trajectory. By the end of the fiscal year 2020, Can Fin Homes reported a loan portfolio of ₹20,509 crore, representing a year-on-year growth of approximately 13.5%.

In the financial year ending March 2021, Can Fin Homes achieved a net profit of ₹370 crore, indicating a strong recovery despite the challenges posed by the COVID-19 pandemic. The company's total income for the same period was ₹1,486 crore, demonstrating operational resilience.

The following table summarizes key financial metrics of Can Fin Homes Limited over recent years:

As of March 2023, Can Fin Homes Limited reported a total loan portfolio of over ₹25,000 crore, with a net profit of ₹480 crore, reflecting a consistent upward trend. The company's focus on retail housing loans has enabled it to cater to a broad customer base, aligning with India’s housing demand.

In terms of market performance, Can Fin Homes' shares are listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). In September 2023, the stock was trading at around ₹650 per share, having shown a year-to-date increase of approximately 15%.

The company's asset quality remained robust, with a Gross Non-Performing Asset (GNPA) ratio of 1.3% and a Net NPA ratio of 0.5% as of the latest disclosures, highlighting its effective risk management practices.

Can Fin Homes Limited continues to uphold its vision of empowering individuals by providing affordable housing finance solutions, contributing to the housing aspirations of millions across India.

A Who Owns Can Fin Homes Limited

As of the latest available data, Can Fin Homes Limited is primarily owned by a mix of institutional and retail investors. The company is listed on the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE).

The shareholder structure is as follows:

The company’s promoters are primarily associated with the Canara Bank, which holds a significant stake in the firm. This connection underscores the stability and financial backing of Can Fin Homes Limited, especially in the housing finance sector.

As of March 2023, the total paid-up equity share capital of Can Fin Homes Limited was reported at Rs. 274.11 crores, with a market capitalization estimated around Rs. 4,500 crores.

In terms of market performance, shares of Can Fin Homes have shown notable trends. The stock was priced at Rs. 570 at the end of Q2 2023, with a 52-week high of Rs. 726 and a low of Rs. 540.

The company's robust financials support its valuation. As of the fiscal year ending March 2023, Can Fin Homes reported a net profit of Rs. 310 crores, reflecting a year-on-year growth of 15%. The total assets stood at Rs. 16,500 crores, showcasing significant growth in the asset base over the years.

With a healthy loan book comprising primarily home loans, Can Fin Homes Limited has exhibited strong fundamentals. The asset quality, as indicated by the Gross Non-Performing Assets (NPA) ratio, was around 1.27%, which remains commendably lower than industry averages.

This shareholder composition and financial performance reflect the confidence of both institutional and retail investors in Can Fin Homes Limited, which continues to expand its footprint in the housing finance space in India.

Can Fin Homes Limited Mission Statement

Can Fin Homes Limited aims to be a leading Housing Finance Company with a commitment to providing financial support to customers for acquiring homes. The company's mission emphasizes a customer-centric approach, aiming to deliver quality service and innovative financial products. Can Fin Homes endeavors to promote home ownership among various segments of society, contributing to the socio-economic development of the country.

The company's strategic objectives are to:

• Facilitate access to housing finance for customers from diverse backgrounds.
• Enhance customer experience through transparent and efficient services.
• Strengthen corporate governance and ensure compliance with regulatory standards.
• Adopt sustainable business practices that ensure long-term growth.

As of the latest financial reports, Can Fin Homes has demonstrated robust financial performance. Here are some key financial metrics:

In terms of operational reach, Can Fin Homes Limited has expanded its branch network to over 160 locations across India, enabling greater accessibility for potential clients. The company has focused on leveraging technology to enhance its service delivery, offering digital solutions for loan applications and customer service.

Can Fin Homes Limited's mission also reflects its commitment to employee development and corporate social responsibility. The firm invests in training programs and community development initiatives, contributing positively to the broader society.

Overall, the mission statement of Can Fin Homes Limited encapsulates its dedication to facilitating home ownership while ensuring sustainable and profitable growth.

How Can Fin Homes Limited Works

Can Fin Homes Limited operates as a housing finance company in India, specializing in providing home loans to individuals and housing developers. The company was established in 1987 and is recognized for its extensive presence across various states with a network of branches.

The business model of Can Fin Homes revolves around offering a range of loan products, including:

• Home Purchase Loans
• Home Construction Loans
• Home Improvement Loans
• Loan Against Property
• Commercial Property Loans

As of the latest financial reports, Can Fin Homes Limited reported a total loan book of approximately ₹28,900 crore as of March 2023, reflecting a growth of about 19% year-on-year. The company’s focus on affordable housing has been central to its growth strategy.

The company primarily sources its funds through the following mechanisms:

• Term Loans from Banks
• Bonds and Debentures Issuance
• Public Deposits
• Retail Borrowings

As of December 2022, Can Fin Homes reported a Capital Adequacy Ratio (CAR) of 18.32%, which is well above the regulatory requirement of 15%. The company’s net interest margin (NIM) stood at 2.85% for the fiscal year 2022, showcasing its efficiency in managing interest income.

Key financial metrics for Can Fin Homes from the fiscal year 2022 are outlined in the following table:

Can Fin Homes also emphasizes risk management through its prudent lending policies. The company’s Non-Performing Assets (NPA) ratio stood at 1.23% as of March 2023, demonstrating effective asset quality management.

Digital transformation is another area of focus, with Can Fin Homes investing in technology to streamline operations. The company launched an online platform to facilitate loan applications, making the process more efficient for customers. This initiative contributed to a sharp increase in customer engagement and loan disbursement rates.

Additionally, Can Fin Homes has been actively involved in several government initiatives aimed at promoting affordable housing, such as the Pradhan Mantri Awas Yojana (PMAY). This has expanded its customer base significantly, catering to a rising middle-class population seeking home loans.

In terms of stock performance, Can Fin Homes Limited is listed on the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE). As of October 2023, its stock price was approximately ₹640, reflecting a market capitalization of around ₹6,500 crore.

The company’s dividend payout ratio stood at 15%, with a dividend yield of approximately 1.50% based on the current share price, appealing to income-focused investors.

Overall, Can Fin Homes Limited’s strategic focus on affordable housing finance, coupled with sound risk management practices, positions it favorably for sustainable growth in the competitive housing finance sector in India.

How Can Fin Homes Limited Makes Money

Can Fin Homes Limited operates primarily in the housing finance sector, providing a range of financial services, which includes home loans, loans against property, and other related businesses. In the fiscal year ending March 31, 2023, the company reported a total income of ₹1,430.37 crores, which reflected a growth of approximately 16.3% year-on-year.

The primary revenue stream for Can Fin Homes comes from interest income generated through its various lending products. For the fiscal year 2023, the net interest income reached ₹1,016.23 crores, up from ₹865.54 crores in the previous year, illustrating a robust increase of 17.4%.

The company’s loan portfolio as of March 31, 2023, stood at approximately ₹36,000 crores, which includes both individual and group housing loans. Individual housing loans contributed significantly, accounting for about 70% of the total loan portfolio.

Can Fin Homes also offers loans against property, which contributed around ₹8,000 crores to the overall loan portfolio. This segment has seen increased demand due to rising property values and consumer interest in leveraging existing assets.

The table below depicts the revenue breakdown of Can Fin Homes Limited for the fiscal year 2023:

In addition to traditional lending, Can Fin Homes has diversified its income through fees and commissions from processing loan applications and ancillary services, which have contributed significantly to overall revenues. For FY 2023, the other income segment amounted to ₹414.14 crores, accounting for 29% of total revenue.

The company also focuses on maintaining a low non-performing asset (NPA) ratio to optimize profits. As of March 31, 2023, the NPA ratio stood at 1.12%, reflecting prudent risk management and effective collection strategies.

Moreover, Can Fin Homes Limited has been optimizing its operational costs, with the cost-to-income ratio decreasing to 22.3% in FY 2023, compared to 25.5% in FY 2022. This improvement enhances profitability, allowing the company to reinvest in its services and expand its market presence.

The company has also been expanding its geographical footprint through a network of branches, with a total of 175 branches across India by March 2023. This strategic expansion has facilitated increased customer acquisition and market penetration, vital for sustained revenue growth.

Future growth prospects for Can Fin Homes are bolstered by the continued demand for affordable housing in India, supported by government initiatives and favorable interest rates. The housing finance market is expected to expand significantly, projected to grow at a CAGR of around 12-15% over the next five years. This market trend positions Can Fin Homes favorably within the competitive landscape, making it well-equipped to capitalize on emerging opportunities.