Image Source: Business Standard
Star Housing Finance Limited, a rising name in India’s affordable housing finance sector, announced plans to raise ₹990 million through a rights issue. This capital raising initiative marks a significant step for the company to strengthen its financial foundation and fuel its growth ambitions in providing housing finance to underserved and middle-income segments. The rights issue reflects Star Housing Finance’s strategic approach to expand its assets under management (AUM), deepen market penetration, and improve its competitive positioning in the rapidly growing affordable housing finance market.
Details of the Rights Issue
Star Housing Finance aims to raise ₹990 million (approximately ₹99 crore) through a rights issue, offering existing shareholders an opportunity to subscribe to new shares in proportion to their holdings.
The fund-raising exercise is intended primarily to augment the company’s capital base to support its loan book growth and operational needs.
The rights issue will be conducted under regulatory compliances prescribed by SEBI and other relevant authorities.
Company’s Growth and Market Strategy
Star Housing Finance focuses on providing home loans to low- and middle-income families in semi-urban and rural India, targeting segments often underserved by mainstream banks.
The company plans to expand its branch network to enhance reach, with a target to increase branches from around 35 locations to 80-85 in the coming years.
The capital infusion via the rights issue will support these expansion plans and enable the company to scale its AUM toward a ₹2,000 crore mark within the next three years.
Financial Performance and Capital Structure
Star Housing Finance posted a notable profit growth of 141% in fiscal 2025, underlining the business’s momentum and operational efficiency.
As of March 2025, the company’s net worth stood around ₹144 crore, with borrowings exceeding ₹420 crore.
The rights issue proceeds will be used solely for growth purposes and not for repayment of liabilities, ensuring healthy balance sheet enhancement.
Market Outlook and Competitive Positioning
The affordable housing finance sector in India is gaining steam due to supportive government policies and increasing demand for housing among emerging middle-income groups.
Star Housing Finance aims to capitalize on these market dynamics with a customer-centric approach, leveraging innovative financing models and localized operations.
The company is also planning a potential listing on the National Stock Exchange of India (NSE), which would increase its market visibility and liquidity.
Strategic Importance of the Capital Raise
Raising funds through a rights issue provides an efficient way for a growing company like Star Housing Finance to strengthen its capital without excessive dilution.
The move demonstrates confidence in current investors and aligns with the company’s long-term vision for sustainable growth.
Enhanced capital adequacy will allow Star Housing Finance to accelerate lending activities, improve asset quality, and expand into new geographies.
Summary
Star Housing Finance Limited’s ₹990 million rights issue is a milestone initiative designed to solidify its financial base and empower aggressive growth plans within India’s affordable housing finance sector. The company’s focus on rural and semi-urban markets, coupled with expansion and technology-driven strategies, positions it well to meet growing housing demands. With robust financial performance and a clear vision for scalability, Star Housing Finance is poised for a dynamic growth trajectory, leveraging increased capital to serve more customers and deepen market penetration.
Sources: ScanX Trade, Moneycontrol, The Hindu Businessline, Star Housing Finance Limited Investor Presentations and Financial Updates
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