Gold loan NBFC Manappuram Finance expects to achieve a growth of 6% in the current fiscal, having successfully removed toxic assets from its portfolio, company officials told FE.
The company has been decelerating ever since RBI capped loans at 60% of the value of gold collateral in March 2012 , sensing risk on a market downslide. “We have successfully removed the toxicity in our portfolio and expect considerable improvements in the coming quarters. Next fiscal, we will achieve a growth of 15% with the macro environment also looking good,” VP Nandakumar, MD & CEO, said.
“Economic activity is picking up and the government spending on infrastructure is expected to increase. Need for credit will increase and we expect our AUMs to increase. We were suffering on account of higher loan-to-value and that has been cleared,” he said.
Nandakumar said he expected no constraints in capital availability as banks were flush with funds and looking for good companies to lend. The regulator relaxing the LTV to 75% from 60% has also helped improve sentiments.
For the first quarter of the current fiscal, net profit of the company dropped 17% to R43.98 crore from R52.86 crore in the same period of last fiscal. Sequentially, net profit increased from R32.27 crore during the Q4 of FY14. Net interest income declined 18% to R239.5 crore in the quarter ended June 2014 from R293 crore in same quarter last year.
Manappuram Finance has 3,293 branches across 22 states with 2 million customers and does not plan to open new branches as it wants to consolidate its growth. It recently acquired a housing finance company from Jaypee Hotels and expects good growth from the sector. The company has investments of PE funds like Granite Hill, Alchemy Ashmore and Sequoia.