Problems affecting the largest number of people has the least attention paid to it

-Aristotle

It has been exactly the same

in the Indian housing context

The Housing Requirement

The total housing requirement of the country is 200-225 million units • Current status: Available 170 million

house, a shortage of approx 30-55 million.

• In next 15-20 years, additional 70 millions houses would be required

Year 2020 - 100 million additional houses required.

FactsReturns from realty in India are at an average of 14% annually. Merrill Lynch forecast India real estate sector to grow from $12 billion in 2005 to $90 billion in 2015. Housing is expected to account for nearly 90% of real estate sector.

% share of urban population has up from 10.8% in 1901 to 27.8% in 2001 and it is expected to grow faster than rural. In 2001 more than 5000 centers identified as urban centers – 2001 census.

By 2015, 20% (222 million) of total population will reach the 22 early 30 age bracket. Keeping 0.89% mortality rate and average size of household equal to 3, 68 million household will require independent housing—age demographic effect. Taking 30-49 age group, total demand will be much more.

Housing shortage in India: Total housing shortage for period 2007-12, 73.96 million out of which rural housing shortage 47.43 million.

Source: NHB

Segmentation of Indian Households

Figures in brackets indicate annual household incomeSource: Business world, NCAER

1 US$ = Rs 44

Source: National Council of Applied Economic Research, 2005

DHFL’S Prime Customer

Factors affecting housing demand

Population GrowthPopulation > 1 billion people, 191 million households in 2001.Population growth has been 1.5% in 2000-2010.

Nuclearisation Primarily due to employment related

migrationIt reduces the area per household but

increases the overall household formation

AffordabilityIncome growth: With increasing incomes

the per capita floor space area increasesAvailability of finance: Increasing housing

finance penetration with low interest rates drives the boom in house purchase

Tax benefits: Principal & Interest repayment attracts customers for housing finance.

UrbanizationShare of urban population has increased

to 27%.Urbanisation reduces the area per

household but leads to increasing number of nuclear families resulting in formation of more number of households

Housing

Demand

Movement in housing price indexMovement in interest & home loan rates

Growth in economy

Financial savings

India still underleveraged India’s Mortgage/GDP ratio is lowest amongst Asian peers:•India’s mortgage debt in FY ‘07 stood at 6% of GDP ~USD 60 Billion on a GDP of ~USD 1 Trillion •China @ 10%, Philippines @ 12%, Thailand @ 16%, Hong Kong @ 48%, Singapore @ 61%

Ascending Housing Finance penetration in both urban (currently 35%) and rural (currently 7%) India due to:

•Growth in branch network, increasing incomes, evolving demographic profile, and increasing acceptability of loans amongst customers due to high rise in property prices

•Disbursements in the last 3 years account for ~71% of the total outstanding portfolio

•Penetration is expected to go up to 41% in urban India and to 11% in rural India by FY ’12

Data Source: CRISIL, Industry Reports

The housing dreams of theIndian middle & lower income groups

a challenge for the system

The Challenge

An under-serviced segment finding the gap between desire & reality

wider

Affordability Accessibility

•Increasing average cost of housing

•Increasing interest rates

•Regulatory issues (ULCA, Rent Control Act, Stamp Duty, etc)

•Arranging own contribution

•Credit risks : no pay slips, no tax returns, uncertain cash flows

•Absence of Clear titles

•Higher transaction costs

The DHFL Mission

Every Indian must have

Access to affordable, good

quality Housing

The DHFL Action

Purpose

Enabling access to home ownership

Target Segment

The low and middle income household

Strategy

Reach out to larger number of customers with smaller loans instead of servicing a small number of customers with large loans.

Creating a Customer Centric Organization

Techn

olo

gy

EMPL

OYE

E

PROCESS

Our Core Customers

Comprising of groups who do not ‘fit’ into the formal frameworks of normal

banks and HFC’s considered ‘risky’ by them

They may have financial handicaps, but they have

integrity & self worth

The low & middleIncome segments

Our ProcessFocus is on forging relationships with our customers

Direct contact with customers at every stagebusiness generationproperty verification

collection and recovery

Relationship officers in charge of every account

Predictability of service as well as Speed of service

Our TechnologyRegular up gradation of technology to ensure

systems and processes deliver on time

Integrated loan management system to service customers

Enabling capture and retrieval of a large number of customer variables

Facilitates building of predictive models for

understanding credit behavior

Our Employees

Ordinary people who do extraordinary workAll fired by the values of Company mission

Periodic training & skill up-gradation in conjunction with our

customer profileEmphasis on quality, timely delivery and resolution of consumer

issues

A robust performance appraisal system with prime focus on motivating, and career planning

well Recognized & well Rewarded

Our ProductsDeveloped & designed to meet the requirements of our customers : •Plots•Construction•Purchase of flats •Extension & Improvement Loans•Project Loans

Commercial loans including•Lease Rental Financing •Mortgage Loans•Non Resident Property Loans

Built in protection plans offeringCover for loss of job Life cover against accidents and untimely demiseProperty cover against natural calamities

1st Housing Finance Company in India to offer reverse mortgage to senior citizens

Our Reach

DHFL’s captive distribution network covers 190 locations

Tie-Ups with Public Sector Banks provide reach to an additional 85 locations

Acquisition of the housing finance arm of ING Vysya bank covering 25 locations

An Extensive Pan–India Network300 locations across the country

Alliances

Punjab & Sind Bank (“PSB”)Established in 1908, the Punjab & Sind bank has 905 branches / extension counters spread across India DHFL is presently addressing 45 locations with PSB in the states of Punjab, Haryana, Himachal Pradesh, and Jammu & Kashmir in Northern IndiaDHFL intends to scale up the location coverage to 200 with PSB

United Bank of India (“UBI”)Formed out of the amalgamation of four small banks of Bengal in December 1950, the Bank presently has ~1,500 branchesUBI played a significant role in the spread of banking services in different parts of the country, more particularly in Eastern and North-Eastern regions of IndiaDHFL is presently addressing 40 locations with UBI across the Kolkata and Howrah regions DHFL intends to scale up the location coverage to 500 with UBI

UAE ExchangeTie – up with UAE Exchange, Abu Dhabi to reach out to the vast NRI population in the UAE & GEC Countries

Tie-ups

Trust Repaid

DHFL is the second largest housing finance company in the Indian private sector

From a modest beginning in 1984,

Fulfilling the housing needs

Over 2,00,000 families

Asset

INR 6394.51Crs

NPA levels

levels lowest in the industry at 1%

Future PlansBoost Network

New Products

New Segments

Improve Margins

Alliances

This is also expected to help in regional diversification of DHFL’s asset book

DHFL is looking at cross selling of innovative consumer finance products to existing creditable borrowers

DHFL plans to come up with various products for the self employed segments that have largely remained unaddressed by most financial institutions

•Better capital management to reduce funding costs•Technology to support scalability and operational efficiency

•Diversification of regional portfolio concentration•Ready customer base which can be exploited via cross selling initiatives and value added services

Business PerformanceINR Mn (Consolidated) FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘09

Total Interest Income 1,786.2 2,447.2 3,568.1 5,539.3 7,311.5

Total Interest Expense 1,147.4 1,586.5 2,466.8 3,882.3 5,221.7

Net Interest Income 638.8 860.8 1,101.4 1,657.0 2,089.8

PAT 313.0 455.8 538.2 866.6 970.5

Asset Book 16,701.1 24,867.8 35,531.8 44,690.4 61,358.5

Net Worth 1953.5 2766.0 3731.0 4543.9 5251.5

Borrowings 16,688.7 24,371.9 34,402.8 42,587.2 61,760.7

Capital Adequacy Ratio 16.5% 13.3% 14.1% 17.0% 16.2%

Sanctions 8,003.9 13,551.4 16,163.1 21,275.3 27813.50

Disbursements 6,804.1 11,988.6 15,728.8 18,677.2 23387.60

Net Interest Margin (NIM) (%) 3.2 3.1 3.0 3.0 2.9

Net NPA’s (%) 1.3 1.3 1.2 1.1 1.0

BOOK VALUE (Rs.) 38.0 50.0 56.0 59.2 84.4

Key Growth Parameters

FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘092.6

2.8

3.0

3.2

3.43.2

3.13.0 3.0

2.9

Net Interest Margin %

FY ’05

FY ’06

FY ‘07

FY ‘08

FY ‘09

1,786.2

2,447.2

3,568.1

5,539.3

7,311.5

Series1 638.8

860.8

1,101.4

1,657.0

2,089.8

Net Interest IncomeTop Line

Top line has grown at CAGR of 42.2% .

Net Interest Income has grown at CAGR of 34.5%.

Fig. in INR Mn

Key Growth Parameters (contd.)

FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘09

8003.913551.4

16163.121275.3

27813.5Sanctions

Sanctions have grown at CAGR of 36.5%.

FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘09

6804.1

11988.615728.8

18677.2

23387.6Disbursements

Sanctions have grown at CAGR of 36.16%.

FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘090.0%0.2%0.4%0.6%0.8%1.0%1.2%1.4%

1.3% 1.3% 1.2%1.1% 1.0%

Net NPA's

FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘090.0%

5.0%

10.0%

15.0%

20.0%

16.5%13.3% 14.1%

17.0% 16.2%

Capital Adequacy Ratio

Key Growth Parameters (contd.)

FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘090.0

200.0

400.0

600.0

800.0

1000.0

1200.0

313.0455.8

538.2

866.6970.5

PAT (in INR Mn)

FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘090.0

10.020.030.040.050.060.070.080.090.0

38.050.0 56.0 59.2

84.4

Book Value (in Rs.)

FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘090

10000200003000040000500006000070000

16701.0999999999

24867.835531.8

44690.4

61358.5Asset Book (in INR

Mn)

FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘090

10000200003000040000500006000070000

16688.724371.9

34402.8 42587.2

61760.7Borrowings (in INR Mn)

PAT has grown at CAGR of 32.7%.

Book Value has grown at CAGR of 22.1%.

Asset Book has grown at CAGR of 38.4%.

Borrowings have grown at CAGR of 38.7%.

The

JourneyHas just

begun

With changing Indian scenario and more dreams in their eyes, our target audience is having

aspirations stoked to fever pitch.