First priority was to phase out high LTV gold loans; see gold book growth at 15%: Manappuram Finance

Описание: Manappuram Finance stock down over 12% as the Gold Finance NBFC Q1FY22 results were below expectations. The Profits at Rs 437cr was up nearly 19% yoy however it contracted by about 7% on sequential basis, Net interest income came under pressure and gold loan AUM book declined sharply by 13.3% QOQ. The gold NBFC saw decline in gold tonnage by about 11% QOQ and saw rise in NPAs.

In an exclusive conversation with ET NOW, V P Nandakumar, MD & CEO, Manappuram Finance said, more than
Two-thirds of the business is lending against gold and since there was sharp decline in gold prices the first priority was to manage the situation and hence had to phase off book of high Loan to value ratio (LTV). There was liquidity pressure amongst customers in the bottom of the pyramid and they managed the auction rate in the first and second wave. The expected auctions were to be about 3-4% disbursals of gold loans; but fortunately it was less than 2% of disbursals.

Nandakumar believes the next 9 months the NBFC will grow the book at 15% from the base of Q1 and will grow at about 20% cagr at the consolidated book level. He said they have high Capital adequacy ratio on the consolidated book at 34% – but the management wants to limit capital allocation for unsecured business (Microfinance book) and hence may look at getting capital from outside in the MFI book at an appropriate period of time.

Let’s listen to Poonam Saney to get more details on Manappuram Finance
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