Mortgage financier Indiabulls Housing Finance on Thursday reported a marginal 3.3 per cent growth in its profit after tax at Rs 282 crore for the first quarter ended June 30, helped by a lower cost of funds.
The lender had reported a profit after tax of Rs 273 crore in the year-ago quarter.
"Despite loan book coming down, our profitability has remained same, which tells that the company has increased its spread as the cost of funding has come down," its deputy managing director Ashwini Kumar Hooda said.
The lender, in a release, said quarterly earnings have grown for the first time since the September 2018 IL&FS default and the ensuing NBFC liquidity crisis.
The cost of funds has come down by 20 basis points to 8.4 per cent as of June 30, 2021, from 8.6 per cent, Hooda said.
The spread on the book stood at 2.6 per cent.
The net interest income improved to Rs 765 crore from Rs 731 crore in the year-ago period.
The company said its collection efficiency has normalised in June and July and is at around 98 per cent.
Gross non-performing assets (GNPAs) increased to 2.86 per cent from 2.20 per cent in Q1 FY2021.
"GNPA has trend upwards as most of the stress is coming from the wholesale book. A few slippages were also there in the retail book in the quarter because of COVID," Hooda said.
Net NPAs reduced to 1.55 per cent from 1.63 per cent.
The total provisions rose to Rs 3,600 crore (5.5 per cent of loan book), which is 3.9 times the regulatory requirement.
High provision cushion places the portfolio in a strong position to negotiate any macroeconomic uncertainties, stemming from the second wave and expected the third wave of the COVID-19 pandemic, the release said.
The loan book shrunk by 10.52 per cent to Rs 65,438 crore from Rs 73,129 crore in the same quarter of the previous fiscal.
"The strategy is to keep paring down builder loan or large ticket LAP (loan against property) loans that are there. We will continue to originate more and more home loans or granular LAP," Hooda said.
Capital adequacy stood at 30.9 per cent and tier-1 at 24.3 per cent.
For prudent ALM (asset-liability management), the company has voluntarily created a reserve fund for repayment of its $350 million dollar bonds maturing in May 2022.
It will transfer a sum equivalent to 75 per cent of the total maturity proceeds of these bonds, in multiple stages, to a debt repayment trust, which will be managed by IDBI Trustee, the release said.
The first tranche of Rs 682.6 crore, representing 25 per cent of the total dollar bond repayment has already been paid to the trust, it added.
The lender has entered into co-lending partnerships with Central Bank of India for offering housing loans and secured MSME loans, and with Yes Bank to offer housing loans to home buyers at competitive rates.
Talking about fundraising, Hooda said the company is looking to raise USD 200-300 million through equity route before September.
"There are large funds that are looking to buy a stake. We are in touch with a lot of investors and you should see an equity raise in the current quarter," he said.
The fundraise could entail a dilution of around a 10-15 per cent stake in the company, he added.
The company's scrip closed at Rs 270.30 apiece, down 0.33 per cent on BSE.