In an interview to CNBC-TV18, Vellayan Subbiah, MD of Cholamandalam says the QIP money will meet the company's fund requirements for the next 18-24 months.
Going forward, Subbiah says, the company does not plan to raise more funds on the equity side. "We are constantly raising both perpetual debt and subordinate debt to boost the capital adequacy. We are raising debt to fund overall growth and on the equity side it will be for the next 18 months at least," Subbiah told the channel.
The company estimates a loan growth of about 30 percent year on year, he says.
Below is the verbatim transcript of Vellayan Subbiah's interview on CNBC-TV18
Q: What impact would this fund raising have on your capital adequacy ratio? Where is it currently and how will it move post the fund raising?
A: Just before the fund raising we were at about 18.1 and now this takes us close to 20.
Q: How much are you looking at in terms of loan growth and in terms of time? How long will this last you? When will you next raise the capital?
A: Based on our current projections it depends on how the market goes, but based on our current projections it should take us to about 18 to 24 months. Currently, we are estimating a loan growth of about 30 percent year on year.
Q: Is there any more fund raising in this calendar year?
A: Not on the equity side. We are constantly raising both perpetual debt and subordinate debt to boost the capital adequacy. We are constantly raising debt to fund overall growth and on the equity side it will be for the next 18 months at least.
Q: What are you looking at in terms of your net interest margins (NIMs)? What was the cost of money on the debt side and how much could you make in terms of earnings?
A: Depending on the business side, vehicle finance and home equity are our two big businesses. On the vehicle finance side, if one took pure interest margins they run about five percent and it is slightly lower than that, in home equity at about four percent. The good thing in home equity is that it runs much lower operating expenses to average assets. The NIMs have been fairly. Falling interest rate scenario helps us because the vehicle finance book is a fixed book. Those loans are fixed and so in a falling interest rate scenario NIMs go up, but it is the worst environment for our NIMs.
Q: Have the rates fallen? We have seen the governor make noise in terms of cash reserve ratio (CRR) cuts and even a repo cut but did money become cheaper for you?
A: The good thing now is they were beginning to see base rate cuts, almost 60 percent of our funding is down loan from banks. They end up being variable rate loans because every time the bank drops its base rate, the benefit accrues to us. The challenge is the same thing which Reserve Bank of India always talked about which is transmission. When they drop, it does not necessarily force all the banks to drop and so some banks just drop by 5 basis points (bps) and it does not affect at all, very marginal effect but we have seen some banks drop 25 bps. If more banks would drop 25 bps, it will surely help us.
Q: What kind of disbursement targets do you have for this calendar year? Within that target for vehicle financing, do you think 35 percent growth that you have been seeing can be sustained because so many companies have now started to report losses and the environment is very fragile?
A: There are a couple of ways to look at it. We don't generally guide for the year, but we can beat the market a bit because we have been increasing market share as a company over the last two-two and a half years in vehicle finance. What has been happening with the others? We have been seeing certain trends. The two that pointed out certain issues were one was HDFC Bank. Though they haven't disclosed, it appears that most of the issues have been on the heavy commercial side, the medium and heavy commercial segment funding which is a small part of our portfolio.
Our portfolio is predominately light commercial vehicles, small, the Tata Ace's and the Mahindra, the smaller vehicles you get over there and the used portfolio. So, those portfolios have not been affected much. With the exception of the mining situation which hurt us in Orissa, we haven't seen any issues in terms of portfolio quality. The medium and heavy is what has seen the deterioration as far as the numbers are concerned.
Q: Will you throw your hat in for the bank licence contest?
A: We still need to wait to see the final guidelines. There are certain things on the guidelines that do concern us a bit. One issue is the level of promoter dilution that might be required. If we have to go down to 15 percent, it is a huge concern for us. We do need to see the final guidelines because there has been talk of whether 15 percent clause would stay in or not.
The second issue is to know how many licences are going to be given because the more licences that are given out, it could create a massive supply side glut in the short-term. We are a bit concerned about that as well. Those are the two parameters we want to look out for, but once we see the final guidelines it will give us a good sense.
Anda sedang membaca artikel tentang
See loan growth of 30% YoY: Cholamandalam
Dengan url
http://kebugaranhidup.blogspot.com/2013/02/see-loan-growth-of-30-yoy-cholamandalam.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
See loan growth of 30% YoY: Cholamandalam
namun jangan lupa untuk meletakkan link
See loan growth of 30% YoY: Cholamandalam
sebagai sumbernya
0 komentar:
Posting Komentar