MUMBAI: Mortgage lender Magma Housing Finance is planning to double its loan disbursement to Rs 1,200 crore in the current financial year, a top company official has said.
In the past one year, the company had scaled down its construction finance portfolio and sold a large chunk of stressed loans apart from bringing the sales force under the roles. Earlier the sales function was mostly outsourced to direct sales associates.
“We have been through a phase where we had done chronic correction of the past as well as done some amendments. Now we are growing in the right direction. Our loan disbursement in FY19 should double to Rs 1,200 crore,” Magma Housing Finance managing director & chief executive Manish Jaiswal said.
In FY18, its loan book had crimped to Rs 600 crore from Rs 1,000 crore in FY17.
“We did not grow our loan book in FY18. When you are doing surgical operations that is the time you pause, reflect and change. But, now we are poised for growth,” he said.
So far in the current financial year, the company has seen a decent run rate in its home loan book and is confident of maintaining this higher growth rate going ahead.
Its loan book consists of affordable housing, loan against property and construction finance.
Jaiswal said the company plans to reduce its overall loan against property portfolio to 25 per cent, which was earlier 50 per cent.
“Going forward, we want the share of our affordable housing loan segment to be around 55-60 per cent, construction finance to 15 per cent and LAP to be at 25 per cent. Incrementally, we’ve reached there, but the overall book will reach this ratio in the next two to four years,” he said.
It plans to more than double its asset under management to over Rs 6,000 in the next four years from Rs 2,700 crore in March 2018.
In FY18, its gross non-performing assets stood at 5 per cent, while net NPA was at 3.2 per cent.
“I believe that there is a scope for us to improve our loss ratios. We want to bring down gross NPAs to 4 per cent and net NPAs to 2.8 per cent this year,” Jaiswal said.
Close to 78 per cent of its borrowing comes from banks and now has applied for a refinance facility from the National Housing Finance, he said.
So far, it was not eligible for NHB refinance as its net NPA levels, one of the important criteria to avail the facility, were above 3.5 per cent.
“We’ve applied for NHB refinance and are hopeful of getting it. We’ve applied for Rs 300 crore but it is up to the regulator how much to give,” he said.
The refinance facility, if approved, will help the company improve ratings and will in turn help it raise funds from debt market, which should happen over a year or so, he said.
Source: Press Trust of India