CRISIL also revised the outlook on the long-term ratings to ‘Stable’ from ‘Negative’. The rating on the commercial paper (CP) issue and short-term non-convertible debenture programme has been reaffirmed at ‘A1+’. While there has been some improvement in funds raised by IBHFL in Q3FY20, they have mostly come from the banking channel and continue to remain lower than the pre-September 2018 levels.
The incremental fund raising from the debt capital markets has remained very low in recent times.
Secondary market yields for IBHFL paper continue to remain elevated. High dependence on bank funding (largely working capital and securitisation lines) has reduced the diversity in resource profile, CRISIL added.
It also said the pace of bank sanctions has increased since Q3FY20, and that there had been an uptick in retail disbursements and continuing traction in the monetisation of the wholesale portfolio.
IBHFL received bank sanctions (including securitisation lines) of around Rs 11,000 crore in Q3FY20, compared to Rs 7,580 crore in Q2FY20.
Further, it received proposals of around Rs 5,500 crore for sell-down/refinance of assets in its commercial credit book, which have been either executed or are in the process of being executed.
Home loan (HL) and loans against property (LAP) disbursements stood at Rs 4,966 crore in Q3FY20, up almost 25 per cent from the previous quarter. There has been sell-down of wholesale exposures over the past few quarters.
As a consequence, the proportion of commercial credit exposures in total assets under management (AUM) reduced to 16 per cent as on December 31, 2019, from 21 per cent as on March 31, 2018.
The company is taking steps to reduce the commercial credit exposure further in the near term, and is in advanced talks with investors/financial institutions to refinance more such exposures.