 "pnb housing")
After its loan books shrank for more than four years, PNB Housing Finance is looking to almost double its advances to Rs 1 trillion in the medium term.
Its loan portfolio shrank from Rs 74,023 crore at the end of March 2019 to Rs 57,832 crore in September 2022, a level that is a little above what it was at the end of March 2018.
Talking to Business Standard, Girish Kousgi, new managing director and chief executive, made a strong pitch for growth.
Disbursement is expected to grow at 40 per cent year-on-year (YoY) in FY23 over FY22.
The loan books could grow by 10 per cent in FY23.
From next year (FY24), the guidance for disbursement would be 25 per cent and book growth would be 17-18 per cent, said Kousgi, who came on board on October 20, succeeding Hardayal Prasad.
Prasad steadied the company and the balance sheet during a tenure of over two years.
Over the last few quarters, the Delhi-based mortgage lender focused on repairing the books by resolving stressed corporate loans, reorienting retail loans, and attempting to get fresh capital.
It disbursed loans of Rs 3,594 crore in Q2FY23, up from Rs 2,961 crore in Q2FY22.
The disbursements were predominantly in the retail segment. The focus will be on the retail portfolio. Within retail, the thrust is on the affordable category at Rs 3,000 crore, whose share is small in the retail books of over Rs 52,000 crore.
Corporate loans are de-growing and the company is not in hurry to expand them.
It wants to correct the corporate books and reduce delinquency.
It may restart corporate lending after a few quarters. As of September 30, 2022, corporate loans declined by 44 per cent to Rs 5,708 crore as against the year-ago period.
PNB Housing Finance is among firms the Reserve Bank of India (RBI) has placed in the “Upper Layer” (NBFC-UL) under the “Scale Based Regulations” (SBR) for non-banking financial companies.
It will face tighter norms and regulations and growth will depend on meeting the RBI’s capital and leverage requirements as and when stipulated.
Capital infusion has been delayed because the deal with private equity players, envisaging equity capital with management control, fell through.
The company’s debt-to-equity leverage, or gearing, is also high, forcing it to keep growth plans in check.
According to rating agency CRISIL, pursuant to de-growth over the past couple of years, the adjusted gearing (including securitisation) improved to 6.0 times as on June 30, 2022, from 8.0 times as on March 31, 2021.
This compares to a peak-adjusted gearing of 11.0 times as on March 31, 2019.
While its current capital adequacy ratio at 24 per cent is comfortable, it needs more capital to meet its targets.
PNB Housing Finance expects the rights issue to bring in Rs 2,500 crore by early FY24, Kousgi said.
Part of this money (Rs 500 crore) will come from Punjab National Bank, the promoter.
