Edelweiss to double retail loan book to Rs 10,000 cr by Mar'18

Aims to increase share of retail resources to 20%

The Edelweiss group plans to double the pool of retail credit — lending for homes and small and medium enterprises (SMEs) — to Rs 10,000 crore by March 2018.

Anil Kothuri, president, retail finance, said retail exposure comprised housing loans (Rs 2,500 crore) and working capital (Rs 2,500 crore) to SMEs.

The group wants to double the loan book as there was a huge demand in the retail segment. The share of SME loans and housing credit in the retail book would continue to be 50-50, he said.

Edelweiss Housing Finance Limited (EHFL), the group’s housing finance arm, would raise up to Rs 500 crore through a public issue of secured non-convertible debentures (NCDs). The initial issue size would be Rs 250 crore, with a green-shoe option to retain over-subscription up to another Rs 250 crore.

The NCD would help raise capital for portfolio growth and expansion of branches from 45 to 78 over 18 months. A part of the issue proceeds would be used to retire some old debt.

The NCD issue offers investors an opportunity to lock in at an interest rate of 9.57 per cent with a monthly interest of 10 per cent and an annual interest option for 120 months.

S Ranganathan, group chief financial officer, said this was the fourth retail offering (fund raising) from the group. It is trying to broad-base sources of funds and looking for sticky long term resources.

The share of retail in the total resources is now 14% and Edelweiss group like to raise it to 20% in two years, Ranganathan said.

Kothuri said EHFL has grown at a Compounded Annual Growth Rate of 49.5% over past four years. Enabling factors like governments push for affordable housing, benign macros, and falling interest rates are expected to further fuel housing finance growth.

Rashesh Shah, Chairman and CEO, Edelweiss Group said, there is a huge base of under-served individuals and businesses in the country that are not able to secure loans. EHFL has managed to tap this market and create customised product offerings that serve their specific needs.