Lloyds Finance

For the year ended May 31, 1996, the company recorded a 61 per cent jump in total income, a major portion of which came from lease & hire purchase business. Income from corporate finance also recorded a leap of 93 per cent.

However, the high cost of funds, which resulted in low spreads and depressed market conditions, saw lower profit margins.

In February this year, the company raised Rs 108.36 crore through an issue 15% secured optionally fully convertible debentures (OFCDs). However, of this amount, Rs 35.24 crore is still in arrears.

The company has also opted for high cost borrowing such as fixed deposits. Fixed deposits recorded a jump of 209 per cent from Rs 114.33 crore to Rs 354.34 crore.

With this, interest outgo recorded a jump of 122 per cent from Rs 32.57 crore to Rs 72.35 crore.

As far as the current year is concerned, there has been no sign of any relief on the liquidity front.

As such, profit margins would depend on Lloyds ability to pass on the increasing cost of funds to customers as well as generate low cost funds. But the price of the scrip has since fallen below the debenture conversion price.