IIFL Finance predicts 15% AUM loan growth in FY22
By Ankur Mishra
IIFL Finance expects loan assets under management (AUM) to increase by 15% in fiscal year 2022 (FY22), CFO Rajesh Rajak told FE. The lender finds solace in the growth of loans due to improved collections in recent months. Without specifying details, Rajak said collection efficiency maintained the trend after a good show until December 2020. Collection efficiency improved to 98-100% in home loans, 85 -90% in corporate loans, more than 100% in gold loans and the microfinance segment until December 2020.
Partial lockdowns imposed by a few states due to Covid-19 may impact the business, but Rajak said nothing was visible on the ground yet. “If there is an extreme situation, we will be affected like everyone else, but the general idea will be to be less affected than the industry,” Rajak said.
Last week, rating agencies Crisil revised its rating on the company’s IIFL Home Finance arm to “stable” from “negative”. “The current outlook for a return to” stable “revision factors in the continuous improvement of collection efficiency (excluding foreclosures) leading to an increase in asset quality indicators below previous expectations despite a weak macroeconomic environment”, Crisil said. The revised outlook also takes into account improved fundraising for the company, the rating agency said. IIFL Finance had raised “670 crore of non-convertible debentures (NCD) in March 2020. Earlier in March, another rating firm Fitch confirmed IIFL Finance’s long-term issuer default rating (IDR) to” B + ”and removed it from rating supervision. negative (RWN). This reflects Fitch’s vision to mitigate the risk of a downturn in the company’s credit profile due to less adverse economic and funding conditions, which are expected to be broadly supported next year, the rating company said.
Analysts at Kotak Institutional Equities said the fourth quarter (T4FY21) was a good quarter for non-bank financial corporations (NBFCs), with disbursements progressing sequentially across all areas, due to the exit from the moratorium, decline and strong seasonal demand.
“Although disbursements have been strong, loan growth may be moderate. The weak new business momentum in the first half of FY21 will likely lead to loan growth over the next few quarters and a dip in FY22, ”the Kotak Institutional Equities report said on Tuesday.