Company’s microfinance business tastes loss
KOCHI: The leading gold loan company, Manappuram Finance, has reported 38 per cent year-on-year growth in first quarter (Q1) consolidated net profit to Rs367.97 crore compared with Rs266.78 crore the company earned for the same period last year.
However, on a quarter-on-quarter basis, the profit was down by 7.6 per cent compared with Rs398.20 crore the company made for the last quarter of FY20.
Microfinance business reports loss
Importantly, the company tasted a loss of Rs4.18 crore in Q1 for its microfinance business that earned Rs68.11 crore profit a year ago, while the annual profit from microfinance operations in FY20 was to the tune of Rs310.30 crore.
While 100 per cent of the MF borrowers went for the moratorium announced by RBI during April, it dropped marginally to 85 per and is expected to reach 70 per cent in July.
The quarter under review witnessed impairment in financial instruments to the tune of Rs145.27 crore compared with Rs34.13 crore a year earlier, thus representing more than three-fold increase during this period.
Manauppuram said it raised fresh borrowing of Rs1,900 crore in Q1, FY21 on standalone basis through non-convertible debentures (NCDs), commercial papers (CPs) and bank loans.
During the past one year, borrowings through commercial papers (CPs) have dropped from 23 per cent of the total borrowings to just 9 per cent.
While the total borrowings increased from Rs13,611.7 crore to Rs18,600 crore as on June 30, 2020, the dependence on banks and financial institutions declined from 64 per cent to 55 per cent.
At the same time, the contributions to the borrowings from non-convertible debentures (NCDs) increased from 10 per cent to 22 per cent, while ECB now constitutes 14 per cent of the company’s borrowings compared with just 2 per cent a year ago.