Experienced promoter and competent senior management
Ummeed Housing Finance Pvt Ltd (UHFPL) is promoted by Mr. Ashutosh Sharma, who has experience of over 25 years in banking and financial services businesses and held senior leadership positions in institutions like Bank of Montreal and Citi Bank. Further, UHFPL has experienced board with two out of eight directors representing PE investors viz. Morgan Stanley (22.60% stake as on March 31, 2023 (on fully diluted basis), CX Partners (14.89% stake as on March 31, 2023 (on fully diluted basis) and two in capacity of independent directors. The promoter is further supported by competent senior management team with average experience of over a decade in risk analytics, fund raising, underwriting, technology and operations. Mr. Sachin Grover, Chief Operating Officer is a seasoned mortgage finance professional with over 20+ years of experience and was previously associated with organisations like Magma Fincorp, India Infoline and Citi Financial. Mr. Bikash Mishra, CFO has over a decade of experience and previously worked with Manappuram Finance and Encore Capital. The senior management team, given their extensive experience, has been focused on putting in place sound systems and processes.
Acuité believes that the experience of promoter and senior management team along with support from PE investors will stand UHFPL in good stead as it scales up its business.

Healthy capitalization metrics supported by capital raising at regular intervals.
UHFPL has comfortable capital structure with networth (including CCPS) of Rs. 488.20 Cr. as on March 31, 2023 (March 31,2022: Rs. 449.67 Cr.), supported by capital infusion at regular intervals. The company has cumulatively raised Rs.423 Cr. in multiple rounds since its inception in 2016 from multiple PE investors as well as promoter and high networth individuals (HNIs) with recent capital infusion of Rs.168 Cr. taking place in Q2FY2022 from a mix of existing and new investors namely, Morgan Stanley and Norwest Capital. Consequently, capitalisation level remained healthy with capital adequacy ratio (CAR) and Tier-I Ratio at 73.93 percent and 73.25 percent respectively as on March 31, 2023. The steady flow of capital also supported gearing (debt/networth (including CCPS)) which stood at 1.21 times as on March 31, 2023 (0.61 times as on March 31,2022)
Acuité believes that UHFPL will continue to maintain healthy capitalisation levels backed by support from the promoters.
 
Improved Financial Performance
UHFPL reported Profit after tax (PAT) of Rs. 34.60 Cr. during FY2023 (FY2022:PAT of Rs. 18.66 Cr). The higher profits were mainly supported by improved Net Interest Margin (NIM) at 12.74 percent during FY2023 (FY2022: 10.79 percent) as the company increased disbursements of higher yielding secured business loans. However, the earnings profile was partly moderated on account of operating expenses incurred in the expansion of its network branches. Operating Expense to Earning Assets stood at 7.22 percent as on March 31, 2023 as against 7.09 percent as on March 31, 2022. The opex Acuité recognises growth plan envisaged by the management and expects further normalisation in operating costs.
Acuité believes that UHFPL's ability to improve operational efficiencies and contain potential asset quality slippages in the current operating environment and thereby sustain improvement in earnings profile will remain key monitorable.