IIFL Home Finance, an arm of the IIFL Group, is targeting a 15-18 per cent growth in loan book this financial year, against a 12 per cent growth to Rs 20,690 crore in 2020-21, as it is widening sales channels with banks, a top company official said.
The low-cost-housing-focused company saw its net profit jump over 61 per cent to Rs 400 crore in 2020-21, from Rs 246 crore in the previous year, despite a spike in bad loans.
It has sewed up co-lending arrangements with banks like ICICI Bank, Central Bank of India, and Standard Chartered Bank since this February and is looking to enter into such agreements with more banks.
"Our loan book grew 12 per cent to Rs 20,690 crore in FY21, and we expect to grow the loan book at least 15 per cent in the current fiscal.
"If a third wave does not scupper the economy, we'll easily clip at over 18 per cent. Everything depends on how the pandemic pans out," IIFL Home Finance Chief Executive Officer Monu Ratra told PTI on Thursday.
Despite the pandemic aggravating the crisis for the industry that began nearly three years ago after IL&FS imploded, he said the company could increase bottomline (profit) with a net income of Rs 400 crore, up over 61 per cent over Rs 246 crore in 2019-20. "And, I hope to maintain this run rate going forward, too."
Being an affordable housing-focused lender, its ticket size averages Rs 17 lakh, Ratra said.
And, after the subsidy scheme was introduced for low-cost housing a couple of years ago under which the Centre gives up to Rs 2.6 lakh in interest subsidy, the company has credited back over Rs 1,000 crore in such subsidy to over 43,000 customers, he added.
The scheme caps the value of the property at Rs 25 lakh.
He said that over 37 per cent of its assets is PSL (priority sector lending)-compliant and is thus securitised by banks, mostly by the state-owned banks and the rest by private sector players with gaps in their PSL books.
This steady securitisation gives it a stable margin of 4.5 per cent, he said adding helping it give over 2.5 per cent return on assets and over 20 per cent return on equity.
The cost of fund averages at 8 per cent while its earnings on the funds averages at 9.5-10 per cent, he said.
On the asset quality, he said the gross NPA ratio has gone up from 1.35 per cent in FY20 to 1.72 per cent in FY21 but refused to hazard a target for the asset quality this year, saying it is too early to assess the pandemic impact.
On the Q1 performance, he said that this fiscal so far, the dibsursal has touched Rs 850 crore only as the entire June and most of May was shut due to the lockdowns.
Meanwhile, the company currently said it will hit the market with Rs 1,000 crore non-convertible debentures (NCDs) from next Tuesday as first tranche of the Rs 5,000-crore debt raising.
Ratra said the entire proceeds from the NCD issue will be used to shore up the core capital which is trending at around 18 per cent now to high 20 per cent.
The company raises around 35 per cent of funding needs from bank credit and an equal amount from public issue of debt and Rs 2500 crore from the National Housing Bank.
The forthcoming NCD sale is for Rs 100 crore with a green shoe of up to Rs 900 crore aggregating up to Rs 1,000 crore in first tranche, it added.
IIFL Home Finance began operations in 2009 as a wholly-owned subsidiary of IIFL Finance. As of March 2021, almost 75 per cent of its live accounts are from the economically weaker sections/low-income groups.
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