Tag: CreditAccess Grameen

HSBC says this microfinance institution is now attractive post recent correction

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of CreditAccess Grameen Ltd. climbed nearly 8% to hit a day’s high of ₹1,523.40 on Wednesday after the non-banking financial company-micro finance institution reported a 34% year-on-year (YoY) jump in March quarter profit at ₹397 crore on the back of its business expansion.

The CreditAccess Grameen stock has declined over 9% on a year-to-date basis. Post correction, the stock is trading at attractive levels, at 2.8 times its FY26 book value per share (BVPS), said global brokerage firm HSBC.

The brokerage has recommended a ‘buy’ rating but reduced its target price to ₹1,800 per share from ₹1,820 apiece earlier.

HSBC said CreditAccess Grameen’s fourth-quarter profit was marginally ahead of its estimates on stable margins and lower expenses. The brokerage said it has a solid franchise with the ability to deliver high profitability and earnings growth.

“Portfolio at risk 30/60/90 rose, as did credit cost guidance for FY25,” the brokerage said.

At 98.3%, the company’s collection efficiency is healthy, HSBC noted.

Emkay Global said CredAG remains its preferred pick in the MFI space, given its superior return ratios and well-placed management succession, unlike peers.

The brokerage has retained a ‘buy’ call with a target price of ₹2,000 per share

The company’s net interest margin for the quarter improved 91 basis points to 13.1%, compared to 12.2% in the same period last year.

The lender’s pre-provision operating profit was 36% higher at ₹683 crore, backed by a 34% rise in net interest income at ₹922 crore. Total income rose 37% year-on-year at ₹1,459 crore.

Its gross loan portfolio expanded 27% year-on-year to ₹26,714 crore at the end of March with gross non-performing assets ratio marginally tumbling to 1.18% from 1.21% a year back.

“We ended FY24, completing 25 years of our operations, on a solid footing. The growth was well supported by a healthy increase in the customer base by 15% year-on-year to 49.18 lakh. We added over 13.6 lakh customers during FY24,” said Managing Director Udaya Kumar Hebbar.

“Our NIM remained steady at 13% for FY24 while being the lowest-cost lender in the microfinance industry,” Hebbar said.

The company has also proposed a dividend of ₹10 per share.

CA Grameen (CREDAG) is a non-bank-finance company focused on the micro-finance business (MFI), predominantly in the rural areas of India.

At 11.08 am, the scrip was trading 2.03% higher at ₹1,449.65 on the NSE.

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CreditAccess Grameen declares dividend of ₹10, profit jumps 34% to ₹397 crore on strong NII

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Microfinance lender CreditAccess Grameen Ltd on Tuesday (May 7) reported a 33.9% year-on-year (YoY) rise in net profit at ₹397 crore for the fourth quarter that ended March 31, 2024. In the corresponding quarter, CreditAccess Grameen posted a net profit of ₹296.6 crore, the company said in a regulatory filing.

Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, jumped 42.3%, coming at ₹881 crore against ₹619.2 crore in the corresponding quarter of FY23.

The gross non-performing asset (GNPA) stood at 1.18% in the March quarter against 0.97% in the December quarter. Net NPA came at 0.35% against 0.29% quarter-on-quarter. In monetary terms, gross NPA stood at ₹303.7 crore against ₹219.7 crore quarter-on-quarter, whereas net NPA came at ₹90.1 crore against ₹65.7 crore quarter-on-quarter.

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Udaya Kumar Hebbar, Managing Director of CreditAccess Grameen, said, “We ended the FY24, completing 25 years of our operations, on a solid footing having registered 27.0% year-on-year growth in the AUM to ₹ 26,714 crore.

The growth was well supported by a healthy increase in the customer base by 15.3% year-on-year to 49.18 lakh. We added over 13.6 lakh customers during FY24, maintaining our monthly average customer addition run-rate of 1.1 lakh.”

The board has declared a one-time final dividend of ₹10 per share (11% dividend payout ratio), subject to shareholders’ approval at the ensuing annual general meeting of the company towards Silver Jubilee Celebrations.

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The results came after the close of the market hours. Shares of CreditAccess Grameen Ltd ended at ₹1,419.00, down by ₹15.75, or 1.10% on the BSE.

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CreditAccess Grameen shares rally 7% after Goldman Sachs projects 25% upside on healthy profit outlook

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of CreditAccess Grameen Ltd. are trading with gains of nearly 7% on Friday, April 12. The move comes after global broking firm Goldman Sachs initiated coverage on the stock with a ‘Buy’ recommendation, saying the microfinance player has demonstrated a good track record through-the-cycles.

Goldman Sachs is projecting a price target of ₹1,788 per share. This implies a potential upside of 25% over the next 12 months from Wednesday’s closing price. Shares of CreditAccess Grameen have gained over 12% in the last one month.

At 3 pm, the scrip was trading 2.57% higher at ₹1,465.05 apiece on the NSE. The stock has fallen 8% so far this year but up 55% in the last one-year period.

CreditAccess Grameen, a non-bank-finance-company (NBFC), is focused on the micro-finance business (MFI), predominantly in the rural areas of India.

The foreign brokerage believes the company is well positioned to tap into an expanded MFI lending-TAM and is diversifying the customer base/loan book via cross-sell/up-sell opportunities that should drive more predictable and profitable lending growth over next few years with reduced cyclicality, if executed well.

Goldman Sachs forecast a healthy 21% profit CAGR for CreditAccess Grameen, in comparison to the 15% of its coverage universe over FY24-FY26. The strong profit will be based on the strong lending CAGR of around 24%.

Additionally, the microfinance player will see continued superior profitability, with an average return on assets (RoA) of 5.6%. CreditAccess Grameen’s diversified loan book and market share gains will support its profitability estimates. The firm is maintaining a competitive edge on Ind-leading credit costs and operating efficiency.

Can CreditAccess Grameen replicate its success in newer geographies?

The company has been able to garner a market share as a % of loans as of FY23 of 22%, 16%, 9%, and 7% in Karnataka, Maharashtra, Tamil Nadu, and Madhya Pradesh, respectively, where it started the operations in 2015. Moreover, despite a high base in its core states, it has shown a pick up in borrower growth across states translating into healthy AUM growth of over 25% in core states as of the third quarter of FY24.

“We believe that through its well-established operating structure, CREDAG will be able to replicate and gain market share in other states (UP, Bihar, Orissa, Gujarat, Rajasthan, West Bengal and Kerala) where it has progressively made entries in the last 5 years,” Goldman Sachs said in its note.

The brokerage highlighted that the company’s market share in these states is less than 5% thereby providing significant runway of growth through market share gains. CA Grameen has grown its borrower base by 41% in these states translating into AUM growth of 61% in the last 1 year, and the brokerage expects this momentum to continue further.

According to Goldman Sachs, CreditAccess Grameen currently trades at attractive valuation multiples, including 2.7 times price to book (P/B) and 12 times price-to-earnings (P/E) financial year 2025 estimate, representing a 27% discount compared to similar non-banking financial companies (NBFCs) covered by the brokerage.

Key risks, as per the brokerage, include asset quality deterioration; strategy execution particularly around expanding into new geographies and up-selling to vintage customers to develop retail finance book and; adverse weather conditions impacting any geography where concentration of book is high; sociopolitical risk creating moral hazard; and deterioration in rural macro.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CreditAccess Grameen crosses ₹25,000 crore AUM for the first time

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In the 25th year of CreditAccess Grameen’s journey, the country’s largest Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI) has crossed the landmark of ₹25,000 crore asset under management (AUM).

CreditAccess Grameen said in a regulatory filing the AUM growth was in line with the annual growth guidance of 24-25%, fuelled by robust customer additions.

Udaya Kumar Hebbar, Managing Director of CreditAccess Grameen, said, “The vast rural growth potential bodes well for our business as we continue to cover the length and breadth of the country to be the preferred financial partner to low-income households. We are positive about continuing our growth journey sustainably by leveraging the strength of being the lowest-cost lender in the microfinance industry.”

Ganesh Narayanan, Chief Executive Officer of CreditAccess Grameen, highlighted the organisation’s philosophy of evolving with customers, stating, “In line with our philosophy of evolving with customers, we have now scaled our retail finance book to over ₹600 crore.”

CreditAccess Grameen is an Indian microfinance institution headquartered in Bengaluru, focused on providing micro-loans to women customers predominantly in rural areas across India.

As of December 2023 end, the company is operating across 367 districts in 16 states (Andhra Pradesh, Bihar, Chhattisgarh, Goa, Gujarat, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh & West Bengal) and one Union Territory (Puducherry) through 1,894 branches.

Within the NBFC sector, CreditAccess Grameen stock has a market cap rank of 17. It has a market cap of ₹23,398.08 crore.

For the December 2023 quarter, the company reported a 63.8% year-on-year (YoY) jump in net profit at ₹353.4 crore.

Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, jumped 42.4%, coming at ₹1,292.2 crore against ₹907.7 crore in the corresponding quarter of FY24.

On Monday (February 26), the shares of CreditAccess Grameen opened 0.4% up at ₹1,477.15 on BSE.

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CreditAccess Grameen CEO reiterates AUM growth, credit cost guidance

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bengaluru-based CreditAccess Grameen will be able to grow its asset under management (AUM) at around 24-25% and keep its credit cost within the 1.6-1.8% range, the microfinance lender’s Managing Director and CEO, Udaya Kumar Hebbar told CNBC-TV18 in a post-earnings discussion.

He expects the retail loan book to grow to 3-4% of the overall portfolio by the end of the current financial year, and to further increase to 10% over the next four to five years.

The bank’s cost of borrowing has been stable at around 9.7-9.8%, he said, adding it is not expected to rise any further.  The net interest margin will remain between 12.8% and 13%, he said.

The gross and net non-performing asset (NPA) is likely to remain under 1% for the current financial year.

Hebbar also talked about the changes in the CreditAccess’ borrowing mix. The borrowings from bank has reduced to 50% from 55%.

“We diversified our borrowing beyond India. Almost 22% of our borrowing we raised internationally, and also raised from DFCs in India, as well as from the public market. Therefore, currently, bank borrowing is around 50% We believe this will be between 50 to 55% and the balance will be continuously from internationally, as well as from the domestic DFCs and the public debt,” he said.

We believe that annually about 5% of non-bank mix will go up from here for at least next two years. With that, bank borrowing may move between 45 to 50% in next one to two years, he said.

On January 19, the lender reported a 63.8% year-on-year (YoY) jump in net profit at ₹353.4 crore for the third quarter that ended December 31, 2023.

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CreditAccess Grameen Q3 Results | Profit zooms 64% to ₹353 crore, net interest income up 43%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Microfinance firm CreditAccess Grameen Ltd on Friday (January 19) reported a 63.8% year-on-year (YoY) jump in net profit at ₹353.4 crore for the third quarter that ended December 31, 2023.

In the corresponding quarter last year, CreditAccess Grameen posted a net profit of ₹215.8 crore, the company said in a regulatory filing. The company’s revenue increased 43.3% to ₹850.7 crore against ₹593.5 crore in the corresponding period of the preceding fiscal.

Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, jumped 42.4%, coming at ₹1,292.2 crore against ₹907.7 crore in the corresponding quarter of FY24.

CreditAccess Grameen’s growth in loan portfolio (GLP), surged by 31.5% year-on-year, escalating from ₹17,786 crore to ₹23,382 crore. The borrower base also witnessed a noteworthy expansion, registering a 19.2% year-on-year increase from 39.38 lakh to 46.93 lakh across 1,894 branches.

The collection efficiency stood strong at 98.3%, excluding arrears. The pre-provision operating profit (PPOP) experienced a significant surge of 58.6% year-on-year, rising from ₹379.5 crore to ₹601.8 crore.

However, there was a 41.1% year-on-year increase in the impairment of financial instruments, reaching ₹126.2 crore. Despite this, the institution maintained a prudent approach with total expected credit loss (ECL) provisions at ₹410.7 crore, representing 1.81% of the loan portfolio.

The gross non-performing assets (GNPA), largely at 60+ days past due, stood at 0.97%, and PAR 90+ at 0.75%. The net NPAs remained low at 0.29%, with write-offs amounting to ₹58.7 crore.

CreditAccess Grameen boasted ₹2,558.7 crore in cash, cash equivalents, and investments, accounting for 10% of the total assets.  Additionally, the company maintained a healthy capital position with a capital to risk-weighted assets ratio (CRAR) of 24.5%.

The results came after the close of the market hours. Shares of CreditAccess Grameen Ltd ended at ₹1,685.25, up by ₹38.60, or 2.34%, on the BSE.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CreditAccess Grameen to raise Rs 1,000 crore via NCDs – Check coupon rate, durations and redemption timelines

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of India’s leading microfinance institution CreditAccess Grameen Ltd. gained more than 2 percent on Monday after the company announced that it would raise Rs 1,000 crore by issuing non-convertible debentures (NCDs).

The company said that its board has approved the public issue of secured rated, listed, redeemable NCDs of face value of Rs 1,000 each with a base size of Rs 400 crore. The issue comes with a green shoe option to be exercised in case of oversubscription of up to Rs 600 crore. This aggregates to a total issue size of Rs 1,000 crore.

The issue will be open for subscription from August 24, 2023, to September 6, 2023. The securities will list within six working days from the date of issue closure on both the National Stock Exchange of India and BSE.

The NCDs, rated IND AA-/Stable, will fetch a coupon rate of up to 9.7 percent per annuum with effective yield up to 10.13 percent per annum depending on the tenor of the bonds.

CreditAccess Grameen will launch seven series under the issue with a tenure of 24 months for Series I and II, 33 months for Series III and IV, 50 months for Series V and VI and 60 months for Series VI and VII.

The redemption date would be 24 months, 36 months, 50 months and 60 months from the deemed date of allotment.

Notably, this is the second tranche of NCD issue for CreditAccess Grameen after the company raised Rs 500 crore last year from the November 2022 tranche I.

Shares of CreditAccess Grameen are trading 1.7 percent higher at Rs 1,391. The stock has gained nearly 55 percent so far in 2023.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CreditAccess Grameen expects strong growth in FY24, says CEO Udaya Kumar Hebbar

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a recent interview with CNBC-TV18, Udaya Kumar Hebbar, Managing Director and CEO, CreditAccess Grameen, one of India’s leading microfinance company,  shared positive insights on the company’s performance and future prospects.  Expressing optimism about the financial institution’s growth trajectory, Hebbar highlighted key indicators that support its positive outlook.

One of the key highlights from the interview was the prediction of an impressive portfolio growth for the financial year 2023-2024.

Hebbar stated, “We guide 20-25 percent in terms of portfolio growth and 15-18 percent customer growth.”

This growth projection demonstrates the confidence that CreditAccess Grameen has in its ability to cater to the financial needs of its customers effectively.

The company’s customer base is also expected to witness significant expansion, with Hebbar projecting a growth rate of around 15-18 percent in the same period. This notable customer growth reaffirms the institution’s commitment to financial inclusion and its ability to reach out to more underserved communities.

Discussing the recent performance, Hebbar expressed satisfaction with the results achieved during the first quarter of the fiscal year 2023-2024.

“Quarter one has been a good quarter for CreditAccess Grameen, we have grown with customer acquisitions, growth with good disbursals,” he stated.

This strong performance during the initial months of the fiscal year sets a positive tone for the company’s future operations.

Despite the encouraging performance, Hebbar affirmed that the company would adhere to its current guidance while closely monitoring market dynamics. He emphasised, “We want to wait for one more quarter and will review if there is a change in guidance but at this point of time, we are sticking to our guidance and we will review after a quarter.”

This cautious yet proactive approach ensures that CreditAccess Grameen stays responsive to any changes in the economic landscape.

CreditAccess Grameen’s ability to maintain a healthy net interest margin (NIM) was another crucial aspect discussed during the interview.

Hebbar revealed, “In terms of NIMs, we guided 12-12.2 percent.”

The management’s emphasis on cost control has enabled the company to optimise its cost of funds efficiently, thus positively impacting its NIM and overall profitability.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CreditAccess India BV to offload 5.8% stake in CreditAccess Grameen via block deal

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Promoter CreditAccess India BV is likely to sell up to a 5.8 percent stake worth Rs 1,107 crore in microfinance firm CreditAccess Grameen via a block deal on Friday (June 30), sources privy to the developments told CNBC Awaaz.

The base price for the block deal is likely to be Rs 1,230 per share, sources close to the development said. As of March 31, 2023, Dutch firm CreditAccess India BV held a 73.68 percent stake in CreditAccess Grameen.

The Bengaluru-headquartered NGO-turned microlender, which went public in 2018 with a Rs 400-crore IPO, is the largest micro-financer in terms of loan book with assets under management (AUM) of Rs 16,540 crore as of September.

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The company reported an 86.4 percent year-on-year jump in net profit at Rs 296.6 crore for the fourth quarter that ended March 31, 2023. In the corresponding quarter last year, the company posted a net profit of Rs 159 crore.

Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, rose 29.7 percent year-on-year to Rs 719.8 crore against Rs 554.7 crore in the corresponding period of the preceding fiscal.

The total income increased by 29.3 percent year-on-year from Rs 824.5 crore to Rs 1,066.2 crore and pre-provision operating profit (PPOP) increased by 36.3 percent year-on-year from Rs 368.8 crore to Rs 502.9 crore. The impairment of financial instruments declined by 30.3 percent year-on-year from Rs 151.0 crore to Rs 105.3 crore.

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CreditAccess Grameen, which started off as an NGO T Muniswamappa Trust in 1999 and subsequently got converted into a micro-finance firm in 2007, employs over 15,660 people.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow