Startup Deep Dive : Shubham Housing Development Finance — profit went from Rs 25 crore to Rs 136 crore in two years

In the year ending March 2022, Shubham Housing Development Finance Company made a net profit of just ₹25 crore on total income of ₹348 crore, and its bad-loan ratio climbed to 3.6% (FY2022, ICRA). Two years later, in FY2024, the same lender posted a profit of ₹136 crore, more than five times higher, while its bad-loan ratio had fallen to 1.2% (FY2024, ICRA) — a recovery built on lending to exactly the people most banks will not touch: self-employed tailors, vegetable sellers and small contractors who cannot produce a payslip.

Shubham is an affordable-housing lender, not a bank, and it survives by doing the opposite of what a payslip-driven credit model does. It lends against the value of a modest home instead of a salary slip, and it has built a ₹5,356-crore loan book (as of 31 December 2024, CARE Ratings) doing exactly that. This piece traces how a company founded on a bet about India’s informal workforce nearly stumbled during the pandemic, was rescued by a ₹600-crore capital infusion, and is now preparing for a possible stock-market listing.

Quick facts

What they do

Shubham Housing Development Finance is a Gurugram-headquartered housing finance company that lends to people banks generally turn away: self-employed shopkeepers, small manufacturers, drivers and daily-wage earners who own or want to build a home but cannot produce the salary slips and income-tax returns that formal lenders demand. Its loan book covers home purchase loans, home improvement and extension loans, loans for constructing a house on land the borrower already owns, and loans against property, all secured against the underlying property rather than underwritten on documented income (ICRA, September 2024). As of December 2024, the company operated 147 branches across 12 states, with a loan book — its assets under management, or AUM — of ₹5,356 crore (CARE Ratings, March 2025); by December 2025, industry reports put that figure at roughly ₹7,500 crore across 200-plus branches (as reported, 2026).

The origin

Sanjay Chaturvedi spent more than two decades inside conventional consumer lending before starting Shubham — stints at Citibank, HSBC, GE Consumer Finance and First Gulf Bank in the UAE, and a spell setting up a lending and payments business at Reliance Retail. That career gave him a close view of exactly who those institutions would not lend to: the roughly four-fifths of India’s workforce that earns a living informally, with no payslip, no audited income statement and often no clean paper title to the land they live on. Shubham Housing was incorporated in February 2010 and received its housing finance company licence from the National Housing Bank in January 2011 (CARE Ratings, March 2025), built on the wager that this population was not actually a bad credit risk — it simply could not prove, on paper, what it already was. The company’s underwriting had to be rebuilt from scratch around cash-flow assessments, doorstep verification and the value of the property itself, rather than around a salary certificate. Rupa Basu joined the founding team and is listed today as a promoter and executive director alongside Chaturvedi (ICRA, September 2024).

The struggle years

Growth in the years after launch was steady but capital-hungry: an affordable-housing lender needs equity behind every loan it writes, and Shubham raised money in stages through the 2010s — a ₹122-crore Series C round around 2014, then a larger ₹305-crore round in January 2018 that brought in Premji Invest as a new anchor investor alongside existing backers Helion Venture Partners and Elevar Equity, while early investors Accion’s Frontier Investment Group and Saama Capital exited (Business Standard, 24 January 2018; YourStory, January 2018). The business kept scaling through the following years, shifting its mix somewhat toward salaried borrowers — India Ratings noted the salaried share of the book rose to around 57% by June 2021 from about 51% two years earlier — as management leaned toward a steadier income profile.

Then came the pandemic. Covid-19 hit exactly the population Shubham had built its business around: self-employed and informal-income borrowers whose cash flows are the first to dry up in a shock. Collections deteriorated through 2020, recovered somewhat in the second half of FY2021 once the loan moratorium lifted in September 2020, and then slipped again in the first quarter of FY2022 during the second wave (ICRA, September 2024). The damage shows up starkly in the numbers: FY2022 profit after tax fell to just ₹25 crore, its return on managed assets slipped to 0.9%, gross non-performing assets rose to 3.6%, and gearing — the ratio of borrowings to net worth — climbed to a stretched 3.8 times (ICRA, September 2024). For a lender whose entire model rests on the claim that informal-income borrowers repay reliably, this was the year that claim was tested hardest.

The turning point

The rescue came in the form of capital. In a round reported at roughly $112 million, led by British International Investment, LeapFrog Investments, the Asian Development Bank and Premji Invest, Shubham brought in about ₹600 crore of primary equity during FY2023 (British International Investment; ICRA, September 2024, which records the “last raised Rs. 600 crore in FY2023” that underpinned the company’s recapitalisation). The effect on the balance sheet was immediate and dramatic. Capital adequacy — the buffer of equity a lender holds against its risk-weighted loans — jumped from 36.9% in FY2022 to 61.3% in FY2023 (ICRA, September 2024). Gearing fell from 3.8 times to 1.7 times over the same period. With a stronger balance sheet to lend against and asset quality stabilising, profit after tax rebounded from ₹25 crore to ₹92 crore in FY2023, and then to ₹136 crore in FY2024 — a more than fivefold recovery in two years (ICRA, September 2024). Gross NPAs, which had spiked to 3.6% in FY2022, fell to 1.8% in FY2023 and 1.2% in FY2024. The lesson embedded in that swing: an underwriting model built around informal incomes can survive a systemic shock, but only if it has enough capital behind it to absorb the hit while it recovers.

The money behind it

• Series C, ~2014: ₹122 crore raised (Business Standard).
• Series D, January 2018: ₹305 crore (about $48 million), led by Premji Invest, with Helion Venture Partners and Elevar Equity participating; Accion’s Frontier Investment Group and Saama Capital exited (Business Standard, 24 January 2018; YourStory, January 2018).
• FY2023 round (reported ~2022): approximately $112 million overall, of which roughly ₹600 crore was primary capital, led by British International Investment, LeapFrog Investments, the Asian Development Bank and Premji Invest (British International Investment; ICRA, September 2024).
• Series F, December 2024: ₹1,000-crore-plus round — ₹400 crore of fresh primary capital plus roughly ₹600 crore of secondary sale from early investors — led by new investor Multiples Private Equity, with existing backers Asian Development Bank and British International Investment also participating; Premji Invest’s stake fell from 41.5% to 26.8% as it partly sold down (CARE Ratings, March 2025; Avendus Capital; Entrepreneur India, 10 December 2024; DealStreetAsia, 11 December 2024).
• Total raised to date: reported at roughly $237 million (about ₹2,275 crore at $1 ≈ ₹96.0) across six rounds (per Tracxn).
• Current backers (December 2024): Premji Invest, Multiples Private Equity, British International Investment (formerly CDC Group), Helion Venture Partners, Asian Development Bank, and Topaz Inclusions Pte Ltd (LeapFrog) — six private equity and development-finance investors in total (CARE Ratings; ICRA).
• Current stage: private company reportedly exploring a roughly ₹2,000-crore initial public offering, described by the company’s own CFO as a “logical next step” that has not been formally settled with all stakeholders (reported, 2026).

What each backer changed is visible in the record: Premji Invest’s 2018 entry gave the company its first marquee institutional anchor and a platform to scale past ₹300 crore in equity; the 2022-23 round from British International Investment, LeapFrog and the Asian Development Bank rebuilt the capital base after the pandemic shock; and Multiples Private Equity’s December 2024 entry, alongside a partial Premji Invest exit, signalled the company’s shift toward a pre-IPO shareholder register.

How it makes money

• Net interest margin: 7.6% of average total assets in the nine months to December 2024 (CARE Ratings, March 2025).
• Cost of funds: marginal borrowing cost of 9.0% in 9M FY2025, up from 8.6% in FY2024 (CARE Ratings).
• Funding mix (December 2024): private banks 48.0%, National Housing Bank refinance 17.2%, public-sector banks 15.8%, other NBFCs 12.9%, and bond issuances 6.0% (CARE Ratings).
• Credit cost: a low 0.3% of average total assets in 9M FY2025, reflecting recoveries and secured lending (CARE Ratings).
• Operating cost: elevated at 5.4% of average total assets in 9M FY2025, a function of the doorstep, branch-heavy sourcing and collection model this borrower segment requires (CARE Ratings).
• Underwriting discipline: average loan-to-value of about 53% as of December 2024 (CARE Ratings) — the company lends well below the property’s assessed value, building in a cushion against price falls or forced sale.

The part outsiders tend to get wrong is assuming that lending to people without formal income proof is inherently high-risk, subprime lending. Shubham’s own asset-quality numbers argue otherwise: gross NPAs of 1.2-1.4% through FY2024 and into late 2024 (CARE Ratings; ICRA) sit well within the range of many mainstream Indian housing lenders. The reason is that the loans are secured against real property at conservative loan-to-value ratios, and repayment is assessed on actual cash flow rather than a document that can be forged or simply does not exist. The trade-off is that this model is expensive to run — branch networks, doorstep collections and manual cash-flow verification cost more per loan than a bank’s salaried-borrower home-loan desk — which is why operating costs stay high even as credit costs stay low.

The numbers

Figures as reported under Ind-AS; source: ICRA rating rationale, 19 September 2024. Q1 FY2025 figures are provisional.

The most recent update available shows the momentum continuing into FY2025: total operating income of ₹587.4 crore and net profit of ₹112.9 crore for the nine months to December 2024, with total assets of ₹5,458.1 crore (CARE Ratings, March 2025).

Where the money comes from

• Borrower mix: self-employed borrowers made up 60% of AUM and salaried borrowers 40%, as of December 2024 (CARE Ratings).
• City tier: the majority of customers are in Tier-2 to Tier-5 towns, not metro India (CARE Ratings).
• State concentration: Maharashtra alone accounted for about a third of AUM (33% per CARE’s company description, December 2024); the top three states — Maharashtra, Delhi and Uttar Pradesh — made up 61.8% of AUM as of December 2024, down from 63.6% as of March 2024 (CARE Ratings).
• Footprint: 147 branches across 12 states as of December 2024, up from 100 branches two years earlier — 47 new branches were added in the preceding 24 months (CARE Ratings).
• The surprise: despite marketing itself around financial inclusion for the informal sector, four in ten of Shubham’s borrowers by value are actually salaried employees — the company has quietly built a hybrid book rather than a purely informal-income one, likely as a risk-management response learned from the pandemic years.

The risks

• Borrower vulnerability to income shocks: the customer base is, by CARE Ratings’ own description, an “economically-vulnerable borrower segment” concentrated in the informal economy — precisely the group whose profitability collapsed in FY2022 when Covid-19 disrupted cash flows (CARE Ratings, March 2025; ICRA, September 2024). A repeat of a broad income shock would hit this book harder than a salaried-borrower lender.
• Limited portfolio seasoning: a very large share of the loan book is recent. Disbursements in the six quarters to December 2024 equalled about 69% of AUM (CARE Ratings); ICRA separately put disbursements over the eight quarters to June 2024 at 93% of AUM. A book this young has not yet been tested through a full multi-year credit cycle, so today’s low delinquency numbers may understate risk that only shows up as loans age.
• Geographic concentration: Maharashtra alone is roughly a third of the loan book, and three states together are close to two-thirds (CARE Ratings, December 2024). A state-specific economic or regulatory shock — a local real-estate downturn, a natural disaster, a change in state-level recovery law — would be disproportionately damaging.
• Rising cost of funds: the marginal cost of borrowing rose from 8.6% in FY2024 to 9.0% in the nine months to December 2024 (CARE Ratings), a trend that, if it continues, squeezes the interest margin the business depends on, especially since operating costs are already structurally high.

The takeaway

Shubham’s story is a case for a specific, narrow claim: that a lack of formal income documentation is not the same thing as a lack of creditworthiness, and that this gap can be bridged with the right underwriting — cash-flow assessment, doorstep verification and, above all, conservative lending against the property itself. The company’s low loan-to-value ratios and its resulting single-digit non-performing asset ratios, even while lending almost entirely to people banks reject, are the proof of that idea. But the FY2022 collapse is the other half of the lesson: serving a genuinely vulnerable population means the business itself inherits that vulnerability, and it survives systemic shocks only with the balance-sheet cushion — in Shubham’s case, a ₹600-crore capital infusion — to absorb the damage while the underlying borrowers recover. Good underwriting reduces risk; it does not eliminate the need for capital to carry a lender through the moments when that risk shows up anyway.

Frequently asked questions

What does Shubham Housing Development Finance do?

It is an affordable housing finance company that lends to low- and middle-income, largely informal-income borrowers for home purchase, home improvement, home extension, construction and loans against property, secured against the underlying property rather than salary documentation (ICRA, September 2024).

Who founded Shubham Housing and when?

It was incorporated in February 2010 by Sanjay Chaturvedi, a career banker at Citibank, HSBC, GE Consumer Finance and First Gulf Bank, and received its National Housing Bank licence in January 2011. Rupa Basu is the company’s other current promoter and executive director (CARE Ratings, March 2025; ICRA, September 2024).

Who are Shubham Housing’s key investors?

As of December 2024, its backers were Premji Invest (26.8%), Multiples Private Equity (24.5%), British International Investment (13.9%), Helion Venture Partners (9.7%), the Asian Development Bank (9.2%) and Topaz Inclusions/LeapFrog (8.3%) (CARE Ratings, March 2025).

Is Shubham Housing Development Finance profitable?

Yes. It reported a net profit of ₹136 crore in FY2024 and ₹112.9 crore in the nine months to December 2024, after a weak FY2022 in which profit fell to ₹25 crore during the pandemic (ICRA, September 2024; CARE Ratings, March 2025).

Is Shubham Housing planning an IPO?

The company has reportedly begun early discussions with bankers about a roughly ₹2,000-crore initial public offering, though management has said the matter is not formally settled with all stakeholders (reported, 2026).

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• CARE Ratings, press release on Shubham Housing Development Finance Company Limited, March 2025
• ICRA, rating rationale for Shubham Housing Development Finance Company Limited, September 2024
• British International Investment, news release on the $112 million investment in Shubham Housing Development Finance Company (accessed September 2026)
• Avendus Capital, newsroom release on the Series F investment led by Multiples Private Equity, December 2024
• Business Standard, “Shubham Housing raises Rs 1,000 crore in round led by Multiples PE,” December 2024
• Business Standard, “Premji Invest leads Rs 3.05 billion investment in Shubham Housing,” January 2018
• Business Standard, “Shubham raises Rs 122 crore Series C funding,” 2014
• YourStory, “Shubham Housing raises Rs 305 Cr in Series D, Premji Invest acquires 40% stake,” January 2018
• Entrepreneur India, “Multiples Private Equity Leads INR 1000 Cr Funding in Shubham Housing,” December 2024
• DealStreetAsia, “India’s Shubham Housing raises $118m led by Multiples PE,” December 2024
• Reported 2026 coverage of Shubham Housing Finance’s IPO discussions and December 2025 AUM (Mint/IndiaIPO.in aggregation)
• Tracxn, company profile for Shubham Housing Development Finance Company (accessed September 2026)

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