DSIJ.in JULY 10 - 23 , 2017 I DALAL STREET INVESTMENT JOURNAL (^53)
per cent collateral in the form of gold.
Thus, the company always has the
technical NPA, which is currently about
2 per cent. We anticipate the NPA for
June will be lower than March 2017.
With gold price expected to improve
post-GST, gross NPA will be kept below
2 per cent.
Since last year, we have initiated steps to
derisk against gold prices. We have
started collecting interest periodically
and incentivised the customers to pay the
interest monthly, quarterly and half
yearly. The customers paying interest
monthly or quarterly are eligible for
concessions in the interest rates, thus
assisting the company to have the interest
collections that are much better.
Gold loans remain the core
focus for Muthoot. What are
your internal growth targets
and how are other services
growing?
Gold loan sector is poised for a growth of
10 per cent to 20 per cent during the
year, Gold price is also expected to
remain steady in the short term.
During FY17, the company witnessed 46
per cent growth in net profit at 1180 crore, as against810 crore in FY16.
Retail loan AUM stood at 27,278 crore, registering 12 per cent growth in FY17. During FY17, Muthoot Finance acquired 64.60 per cent in equity share capital of Belstar Investment and Finance Pvt Ltd (BIFPL), an RBI registered micro finance NBFC. Its loan portfolio grew by 114 per cent at567 crore in FY17 with profit
after tax of 10 crore as against PAT of 6
crore. Its gross and net NPAs stood at
0.09 per cent and 0.02 per cent,
respectively. The company also acquired
100 per cent stake in Muthoot Insurance
Brokers Pvt Limited, an IRDA registered
direct broker in insurance products. It
generated a first year premium collection
amounting to 70 crore during FY17, as against48 crore in the previous year
During FY17, the company increased its
shareholding in the housing finance
company Muthoot Homefin (India)
Ltd from 79 per cent to 88.27 per cent. Its
loan portfolio increased by 409 crore at 441 crore. Total revenue for FY17 stood
at 24 crore as against2 crore in FY16.
It achieved a profit after tax of 2.87 crore during the FY17, as against1.36
lakh.
During the year, the company increased
its shareholding in the Sri Lankan
subsidiary Asia Asset Finance PLC. It
increased its loan portfolio by 26 per cent
at LKR 866 crore in FY17. Total revenue
for FY17 stood at LKR 213 crore as
against LKR 139 crore in FY16. It
generated a profit after tax of LKR 28
crore during the year as against previous
year profit after tax of LKR 18 crore.
The subsidiaries today contribute about 5
per cent to the group's assets. The
company is looking at increasing the
share of subsidiaries to about 10 per cent
of the group's assets in the coming year.
NBFCs have, over the years,
monopolised number of product
segments, such as consumer durables,
new car segment in small town and truck
finance. It is also observed that NBFCs
have disproportionate share in the niche
segments, which helps NBFC players to
remain profitable.
Source: BCG
DIFFERENT GROWTH DRIVERS
FOR DIFFERENT COMPANIES
Certain NBFCs that transformed
themselves from being a wholesale
focused lender to a retail-centric
business such as Capital First have
been on a faster growth trajectory. The
switch for Capital First worked wonders
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and its retail loan book grew nearly 40
per cent on an annualised basis since
2011-12.The focus on retail segment allows NBFCs
to focus on high growth, high yield