HomeFirst Finance will likely borrow Rs 4,000 crore in 2024-25 (April-March) to grow its loan book, managing director and chief executive officer Manoj Viswanathan, has said. “We have already tied up our requirement for this financial year. We are in discussion with banks for the next year. Most of them are looking to extend lines of credit to us,” he said.
Currently, banks loans comprise 56% of the company’s borrowing mix. Going ahead, the non-banking financial company is looking to increase borrowings from development finance institutions, with the Reserve Bank of India has been cautioning non-bank lenders against over-reliance on bank borrowings. “Overall, we feel that our liability profile is balanced. We should not be having any issues for the next few years,” he said.
The company’s assets under management stood at around Rs 9,000 crore as on December 31. It expects the AUM to grow to Rs 20,000 crore in the next three years. Housing loans comprise 86% of the AUM. Loan against property and shop loans comprise the remaining 14%.
Around 68% of the book comprises loans to the salaried customer segment and the rest is to the self-employed segment. Loan disbursals surpassed Rs 1,000 crore in the December quarter.
Currently, around 6% of disbursals are done through the co-lending route. The NBFC has co-lending partnerships with Central Bank of India and Union Bank of India. By the end of 2024-25, around 10% of disbursals will be done through the co-lending route.
The company remains focused on increasing its return on equity (RoE). The RoE is expected to improve due to a growth in the loan book and higher leverage. “We are focused on return on equity. As we leverage the book, the return on assets will decline in any case. But, RoEs are improving in spite of net interest margins being lower,” Viswanathan said. The return on equity rose 210 basis points year-on-year to 15.8% in the December quarter.