Manappuram Home Finance, a wholly-owned subsidiary of Manappuram Finance, intends to raise Rs 200 crore via non-convertible debentures (NCDs) and is targeting Rs 100 additional as Greenshoe option, said VP Nandakumar, managing director and CEO of Manappuram Finance.

He said the cost of borrowing for home finance companies is still high because the asset size is only slightly above Rs 500 crore. The cost of borrowing for them is at 9.8 percent.

Talking about margins, he said the net interest margin is expected to improve or remain at current levels due to product change. “We are now focusing on small-ticket loans up to Rs 10 lakhs – these are self-constructed properties where independent houses are built, the focus is also on small-ticket LAP to SMEs. This can give us an average yield of 15 percent, so NIMs are expected to improve to 5 percent from the current 4.7 percent.”

With regards to consolidated loan book, he said, “We are on a path to achieving a CAGR of 20 percent for FY20. Around 60 percent is gold loan portfolio and 15 percent is microfinance and balance is distributed amongst vehicles, home finance and on-lending to other NBFCs etc. So, we are on the path to achieving a consolidated growth of 20 percent.”

The asset quality in microfinance business remains high because of the recovery of more than 99.5 percent. They expect commercial vehicle loan book to growth 50-60 percent this year depending on seasonality. Currently, we have crossed Rs 1300 crore in the portfolio. That is the growth plan, said Nandakumar.

First Published:Oct 3, 2019 12:11 PM IST