Infrastructure lender IDFC has said that its first quarter disbursements have slowed down as compared to the same period last year due to delays in implementing infrastructure projects, especially in the power and roads sector.
The company was waiting for the government to expand the definition of infrastructure, which would help the company to diversify into new areas such as purchases of aircraft and ships and education.
Speaking to reporters on the sidelines of IDFC’s AGM at Chennai, company chairman Deepak S Parekh said the sanction of new business came down to Rs 5,799 crore during the first quarter of the current fiscal from Rs 13,000 crore, compared to same period last year.
“The first quarter of last year was the best and first quarter of the current fiscal is worst,” he said, adding that disbursements dropped to Rs 3,000 crore from Rs 6,000 crore. "Loan sanctions are huge, but disbursement is not happening.”
However, Parekh said IDFC would not be changing its budget, disbursements and expectations, since projects are getting delayed due to environment clearance.
The company’s gross approval of loans rose 34 per cent in 2010-11 to Rs 42,716 crore, from Rs 30,442 crore a year ago. Its gross disbursements stood at Rs 26,702 crore (Rs 12,962 crore).“The delay is mainly due to power sector and road projects”, he said.
At present, the company has 45 per cent of the total portfolio in the power sector, while 20 per cent is in transportation, 15 per cent in telecom and rest in other sectors such as tourism, industrial parks, special economic zones and others.
Commenting on the RBI's 50 bps hike in repo rate, Parekh said, “It will impact cost of funds. Lending rates will increase, BPLR will increase by 50 basis points, which our clients will have to pay,” said Parekh.