INDIA SHELTE FIN

One of the fastest growing assets under management among housing finance companies in India, high yields, and granular, retail focused portfolio.

Extensive and diversified Phygital distribution network with significant presence in Tier II and Tier III cities.

In-house origination model to ensure efficient and seamless operations across various key functions.

Technology and analytics-driven company with scalable operating model.

Robust underwriting, collection and risk management systems.

Diversified financing profile with a demonstrated track record of reducing financing costs.

Experienced management team supported by qualified and experienced personnel.

The company requires substantial capital for its business and operations and any disruption in the company sources of financing could have an adverse effect on its business, results of operations and financial condition.

Its inability to comply with the financial and other covenants under its debt financing arrangements could adversely affect the company business, results of operations and financial condition.

Three states contributed to 63.4% of its assets under management for the Financial Year 2023. As such, any adverse developments in these states could have an adverse effect on its business, results of operations and financial condition.

The risk of non-payment or default by the company customers may adversely affect its business, results of operations and financial condition.

If the credit quality of its loan book deteriorates or the company is unable to implement effective monitoring and collection methods, its results of operations and financial condition may be adversely affected.

Its inability to recover the full value of collateral or amounts outstanding under defaulted loans in a timely manner, or at all, could adversely affect its business, results of operations and financial condition.

The company is subject to periodic inspections by the National Housing Bank and the Reserve Bank of India and non-compliance with observations made during any such inspections could result in penalties and fines, and could adversely affect its reputation, business, financial condition, results of operations and cash flows.

The company is affected by volatility in interest rates for both its lending and treasury operations, which could causethe company net interest income to vary and consequently affect its profitability.

The company may face asset-liability mismatches, which could affect its liquidity and consequently may adversely affect the company operations and profitability.

The company has experienced growth in recent years, and its may not be able to sustain such growth in the future.

The company relies significantly on its information technology systems for the company business and operations and any failure, inadequacy or security breach in such systems could adversely affect its business, results of operations and reputation.

Any failure or significant weakness of its internal processes or systems could cause operational errors or incidents of fraud, which would adversely affect the company business, profitability and reputation.

The company may not be able to identify, monitor and manage risks or effectively implement its risk management policies.

The company depends on the accuracy and completeness of information provided by its customers and the company reliance on any misleading information may affect its judgement of their credit worthiness, as well as the value of and title to the collateral.

The Indian housing finance industry is extensively regulated and any changes in laws and regulations applicable to housing finance companies could have an adverse effect on its business.

Its inability to maintain its capital adequacy ratio could adversely affect the company business.

There have been certain instances of delays or non-compliance in connection with regulatory filings in the past by the Company. Its may be subject to regulatory action and penalties for any such past or future non-compliance and its business, financial condition and reputation may be adversely affected.

The Company and its Directors are involved in certain legal and other proceedings. Any adverse outcome in such proceedings may have an adverse effect on its business, results of operations and financial condition.

Any downgrade in its credit ratings could increase the company borrowing costs, affect its ability to obtain financing, and adversely affect the company business, results of operations and financial condition.

Any deterioration in the performance of any pool of receivables assigned or securitized to banks and other institutions may adversely impact its business.

The company relies on third party service providers for all its major information technology services. Any lapse by third party service providers engaged by it may have adverse consequences on the company business and reputation.

The company may face difficulties and incur additional expenses in operating in Tier II and Tier III cities in India where infrastructure may be limited.

The Indian housing finance industry is highly competitive and its inability to compete effectively could adversely affect its business and results of operations.

A portion of the company collections from customers is in cash, exposing it to certain operational risks.

The company`s business is subject to various operational risks associated with the financial industry, including fraud, which may adversely affect its business and operations.

Its inability to detect money-laundering and other illegal activities fully and on a timely basis may expose it to additional liability and adversely affect its business and reputation.

Any termination or failure by it to renew the lease and license agreements for its offices in an acceptable and timely manner, or at all, could adversely affect the company business and results of operations. Moreover, many of the lease and leave and license agreements entered into by it may not be duly registered or adequately stamped.

The company requires certain statutory and regulatory approvals for conducting its business and the company inability to obtain, retain or renew them in a timely manner, or at all, may adversely affect its operations.

The company has had negative cash flows in the past and may continue to have negative cash flows in the future.

The non-convertible debentures of the Company are listed on BSE Limited, and its subject to rules and regulations with respect to such listed non-convertible debentures. If the company fail to comply with such rules and regulations, its may be subject to certain penal actions, which may have an adverse effect on its business, results of operations, financial condition and cash flows. Further, the trading in our listed non-convertible debentures may be limited or sporadic, which may affect its ability to raise debt financing in the future.

The company depends on third-party selling agents for sourcing a certain portion of its customers, who do not work exclusively for it.

Significant changes by the Government, the Reserve Bank of India or the National Housing Bank in their policy initiatives facilitating the provision of housing and housing finance or any change in the tax incentives that the Government currently provides to Housing Finance Companies may have an adverse effect on its business, results of operations and financial condition.

The COVID-19 pandemic has had certain adverse effects on its business, operations, cash flows and financial condition and the extent to which it or the effect of outbreaks of any other severe communicable disease may continue to do so in the future, is uncertain and cannot be predicted.

The company is exposed to risks that may arise if its customers opt for loan balance transfers to other banks or financial institutions, or if customers pre-close their fixed-rate loans, or if customers face increased difficulties in refinancing their existing housing loans from other banks and financial institutions to the Company.

Some of its Directors and one of the company Promoters, WestBridge Crossover Fund, LLC, may have interests in entities in businesses similar to its, which may result in conflicts of interest with the company.

The company has, in the past, entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.

The company is dependent on a number of Key Managerial Personnel and its Senior Management, and the loss of, or the company inability to attract or retain such persons could adversely affect its business, results of operations and financial condition.

Certain of its Promoters, Directors, Key Managerial Personnel and Senior Management may be interested in the Company other than in terms of remuneration and reimbursement of expenses.

The company has certain contingent liabilities and commitments that have not been provided for in its financial statements, which, if they materialize, may adversely affect its results of operations, financial condition and cash flows.

The company has, in the last 12 months, issued Equity Shares at a price that could be lower than the Offer Price.

The average cost of acquisition of Equity Shares by the Selling Shareholders may be less than the Offer Price.

The company operations could be adversely affected by strikes or increased wage demands by its employees or any other kind of disputes with the company employees.

Th company insurance coverage may not be sufficient or may not adequately protect it against all material hazards, which may adversely affect its business, results of operations and financial condition.

The bankruptcy code in India may affect its rights to recover loans from the company customers.

The company may be unable to protect its brand name and other intellectual property rights which are critical to its business.

Its ability to pay dividends in the future will depend on its earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.

The company has referred to the data derived from industry report commissioned by the Company from CRISIL MI&A and reliance on such information for making an investment decision in the Offer is subject to certain inherent risks.

The company will continue to be controlled by its Promoters after the completion of the Offer and any substantial change in the company Promoters` shareholding may have an impact on the trading price of its Equity Shares which could have an adverse effect on the company business, financial condition, results of operations and cash flows.

The company has included certain non-GAAP financial measures and other selected statistical information related to its operations in this Draft Red Herring Prospectus. Such non-GAAP measures and statistical information may vary from any standard methodology that is applicable across the financial services industry and may not be comparable with financial or statistical information of similar nomenclature computed and presented by other companies.

Negative publicity could damage its reputation and adversely impact the company business and financial results.

The company funding requirements and deployment of the Net Proceeds are based on current circumstances of its business and may be subject to change based on various factors. Any variation in the utilization of the Net Proceeds would be subject to certain compliance requirements, including prior shareholders` approval.

A portion of the proceeds from this Offer will not be available to the company.