Shriram Housing Finance looking at 50-60% hike in loan disbursement in FY21

Mortgage lender Shriram Housing Finance is looking at around 50-60 per cent increase in loan disbursement to Rs 1,800 crore in the current financial year, a top company official said.

The company, promoted by Shriram City Union Finance, had disbursed Rs 1,127 crore in the fiscal ended March 31, 2020.

In the first quarter, we didn't do much business. Despite that, in FY21, we will do about 50-60 per cent more business than what we did in FY20. We will end this year with a disbursement of Rs 1,800 crore, the company's managing director and CEO Ravi Subramanian told PTI.

 

In the first quarter of the current fiscal, the housing financier disbursed Rs 77.4 crore, a decline of 68.1 per cent year-on-year, owing to the nationwide lockdown imposed to contain the spread of the coronavirus.

In the second quarter of FY21, it disbursed around Rs 520 crore, which was 20-25 per cent more than what it disburses in every quarter, he said.

The biggest tumbling block was COVID-19 in Q1, but we have come back on trajectory. Growth in Q3 is more than Q2, and growth in Q4 will be more than Q3, he said.

The company's loan portfolio includes housing loans, loan against property (LAP) and construction finance. While housing finance contributes 60 per cent of the loan disbursement, share of LAP and construction finance is 35 per cent and 5 per cent, respectively.

In the current financial year, he sees growth coming majorly from the housing loan segment.

Home loan is where we will build our books. More than people buying properties, a lot of people are extending their existing properties by building another room or two on their terrace. The self-construction deal is actually seeing an increase in the tier-2 and 3 cities. And I see that contributing a lot more to the growth this fiscal, Subramanian said.

The mortgage financier is also looking at raising Rs 400-500 crore in the third quarter, which would largely be in the form of bank borrowing and securitisation transactions, he said.

In the second quarter of FY21, it raised Rs 100 crore through securitisation route and Rs 200 crore through bank borrowing and non-convertible debentures.

The company does not expect much demand for one-time restructuring of loan accounts affected by COVID-19, announced by the Reserve Bank of India.

I don't see more than 4-5 per cent of my loan book facing restructuring. It is a tool used for curing large value loans. The kind of the ticket size we have and looking at the granularity of our portfolio, I don't see too many loans being restructured, Subramanian added.

The average ticket size of the company is around Rs 17-20 lakh.

The company has 73 branches spread across the country and plans to open 27 more branches by end-March, he said.