AU Financiers to securitise loans worth Rs 2,000 crore

AU Financier Ltd (AUL) , which will turn into a small finance bank (SFB) next year, plans to securitise loans worth Rs 2,000 crore by the end of the month.

It has sold retail auto loans (about Rs 100 crore) to Standard Chartered Bank. This will help AUL, the Jaipur-based non-banking finance company (NBFC), to generate liquidity for business operations.

Sanjay Agarwal, managing director, AUL said that it has securitised or sold loans worth Rs 1,500 crore already. It includes transaction with Standard Chartered Bank. 

The NBFC has got Baa3 rating from Moody's for transactions with international banks as they seek rating from global ratings agencies to meet stringent accounting norms.

AUL's key institutional investors include International Finance Corporation, Warburg Pincus and Chryscapital.

AUL posted a 52% increase in its net profit at Rs 140.23 crore in 2014-15. Its total income rose by 19% to Rs 737 crore in 2014-15, from Rs 619 crore in 2013-14.

Its assets under management grew by 25% to Rs 5,567 crore at end of March 2015, from Rs 4,449 crore in March 2014.

Agarwal said the finance company is in midst of transforming into a small finance bank. It is expected to commence operation early in calender year 2017. It has appointed Accenture as partner for building the information technology backbone and Aon Hewitt as advisor for human resources for the transformed bank.

Au Financiers is one of the 10 financial sector players which have received in-principal nod for SFB. 

AU Finance has already inked a pact with Kedaara Capital and Partners Group to sell up to 100% stake in housing finance company for regulatory compliance and  as a part of its plans to have adequate capital for the SFB.

The transaction is subject to regulatory approvals and is likely to get concluded by June 2016.