Tag: Gagan Banga

Indiabulls Housing expects 15% AUM growth in FY23: Gagan Banga

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

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Gagan Banga, vice chairman and managing director, Indiabulls Housing Finance, on Thursday, mentioned that the company expects assets under management (AUM) growth to be 15 percent in FY23.

He said, “We are fairly confident that in FY23, we should be able to grow AUM by about 15 percent over where we end FY22.”

Indiabulls Housing Finance recently came out with its Q3 earnings. The mortgage lender reported an 8 percent decline in its consolidated net profit in the December quarter. Its profit after tax (PAT) for the December quarter came in at Rs 303 crore, down from Rs 329 crore in the year-ago period.

The company’s gross NPA came in at 3.18 percent during the December quarter as against 2.44 percent in Q3FY21. Meanwhile, its net NPA stood at 1.80 percent during the period under review, compared to 1.46 percent in the corresponding period last year.

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Banga shed light on the increase in gross non-performing assets (GNPAs) and net NPAs observed in Q3. He mentioned that it was due to RBI re-classification. He explained that the company is targeting that its GNPA does not breach 350 basis points (bps). He highlighted that the lending model is shaping up well and they were able to disburse Rs 1,500 crore in the previous quarter.

He said, “As we have been guiding earlier, the gross NPAs, we do not expect them to breach 350 bps and accordingly we have created provisions.”

Watch the video for the full interview.

(With PTI inputs)

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Indiabulls Housing Finance book realigned in Q2; co expects 15-20% AUM growth in FY23

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

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Mortgage financier Indiabulls Housing Finance on Thursday reported an 11 percent dip in its net profit at Rs 286 crore in the quarter ended September due to a decline in its loan book. The lender’s profit after tax stood at Rs 323 crore in the same quarter of the previous fiscal. Total loans disbursed as of September 30, 2021, under the Emergency Credit Line Guarantee Scheme (ECLGS) stood at Rs 176 crore, amounting to only 0.27 percent of the loan book. Gross NPAs have stood to 2.69 percent in the second quarter of the financial year 2021-22 from 2.21 percent in the previous quarter of the year-ago period. In an interview with CNBC-TV18, Gagan Banga, Vice Chairman and Managing Director at Indiabulls Housing Finance, discussed the earnings fineprint.

The company has set up a base for the growth trajectory to begin starting next fiscal. Banga believes the assets under management (AUM) will now stabilize in the second half of the year and stop degrowing.

“From fiscal 2023 onwards, the AUM should be steadily growing at 15-20 percent,” he said.

Three years ago, a large portion of Indiabulls’ disbursals were retail but a huge contributor to its profitability was the wholesale book.

“Over the last few quarters, the focus transformed completely,” Banga shared.

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In the month of September, Indiabulls Housing Finance did disbursals of about Rs 325 crore around co-lending.

“This quarter, we should be able to do about Rs 1,000 crore and next quarter around Rs 1,500 crore of co-lending, which should be about a third of our disbursals and the balance two-thirds would be what we will do about our balance sheet to subsequently securitise,” he explained.

All parts of the revived business model are working, he noted.

“The balance sheet is extremely strong, we are in a good position to take advantage of the favourable macro,” Banga noted.

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“We will continue to remain a specific niche player focusing on the self-employed segment, which generally is a largely underserved segment; focusing more on tier-III to tier-V locations, which also continue to remain underserved. I don’t have any business to be lending to a salaried employee of a very large IT services company in Bangalore or Mumbai. My business is to lend to what is a relatively underserved sort of a borrower who builds their track record,” he explained.

For the full interview, watch the accompanying video.

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Indiabulls Housing looking at higher ticket sizes with co-lending model

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

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Indiabulls Housing Finance is looking at higher ticket sizes with its co-lending model, Vice Chairman and Managing Director Gagan Banga told CNBC-TV18.

The housing finance company has raised Rs 800 crore via non-convertible debentures (NCD). It also raised funds via a stake sale of Rs 251 crore in OakNorth Holdings (a wholly-owned parent company of OakNorth Bank PLC).

“The ticket sizes are slowly increasing and the good thing is that with some of our co-lending partners, we are also able to go beyond just priority sector and look at higher ticket sizes with the private banks and with the financial institutions. So that is allowing us do more numbers,” said Banga.

Also Read: Indiabulls Housing Finance repays Rs 7,075.8 crore to NCD investors in Sept

“Our core business is doing extremely well. We are back to, more closely, regular disbursal numbers after about four-and-a-half years. And as management, we want to single-mindedly focus on fulfilling the guidance that we have set for the second half of the year,” he said.

According to him, developers should focus on clearing inventory rather than price increases. “Generally, as a trend, people are opting for homes though I would still say that real estate inflation has not kicked in, which on an overall basis is a good thing; especially for the mid to premium end. However, I am hopeful that all the developers focus more on getting rid of inventory rather than price increases in the short term,” said Banga.

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Speaking on the sale of some of the company’s stake in OakNorth Holdings, he said, “We have diluted our stake over a period of time and we hold a very small number. It’s non-strategic; we held 1.5 percent. We were getting a good number and a decent valuation premium to the previous rounds. We thought that it’s best to get long and focus on our core business.”

For the entire management interview, watch the video

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

Indiabulls Housing Fin to raise Rs 1,000 crore via NCDs; expects 15-20% AUM growth from FY23

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

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Indiabulls Housing Finance has issued non-convertible debentures (NCDs) worth Rs 1,000 crore. Gagan Banga, vice chairman and managing director, discussed this further.

The coupon range for this particular issue is roughly from about 8.5-9.75 percent depending on the tenor and the instrument, he said.

“We are looking at doing a public issue after about three years. We were large participants in the public issue space, we had raised close to about Rs 9,000 crore till 2018 through this space. Last three years were tough for non-banking financial companies (NBFCs). We thought this is the appropriate time to get back to the market,” he added.

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According to him, demand in home loans has been strong. “Demand is pretty clearly strong for home loans. Most of the top developers are continuing to report record sales, registrations are also high across the country. For Indiabulls Housing specifically, the mid-income group is very important for our home loan product segment and that is showing a lot of demand. I haven’t seen such demand in the last 15 years,” Banga mentioned.

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He believes the demand in real estate sector is sustainable. “In our view, this demand is certainly sustainable for at least next 6-8 years,” he said.

Banga is optimistic of reaching Rs 500-600 crore of per month target via co-lending before March 2022.

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He expects to see assets under management (AUM) growth of 15 percent FY23 onwards. “We should be able to grow our AUM year-on-year (YoY) by about 10 percent. We expect AUM growth on a net basis to start from the second half of the year and for the full year to get us to about 10 percent and from next year, we should be growing our AUM between 15 percent and 20 percent,” he explained.

For the full interview, watch the accompanying video.

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

RBI’s guidelines don’t impact HFCs materially, says Indiabulls’ Gagan Banga

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

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The Reserve Bank of India (RBI) has released a new set of directions related to maintenance of liquidity coverage ratio, risk management, asset classification and loan-to-value ratio, among others, for housing finance companies (HFCS).

These measures, which were announced in October 2020, have come into effect as of now. Gagan Banga, Vice Chairman and Managing Director, Indiabulls Housing Finance shared his views and outlook on the same.

“What RBI has effectively done through this is it has harmonized whatever further regulations pertaining to non-banking financial companies (NBFCs) and HFCs wherever there was a gap,” he said.

“Most large HFCs would be much larger, nothing in this is disruptive for the large HFCs, specifically for Indiabulls Group, etc it is not even relevant,” he added.

“We do not lend to our group entities. From a more general reaction to that, 15 percent and 25 percent or most things that are there in the compiled circular are already in play,” he said.

The company has cash covering almost the next one year of repayments as against 50 percent of the next 30 days that is being prescribed by the regulator, he said.

According to him, whatever the RBI is doing for the last one to one and a half years is firmly taking grip of the housing finance sector and strengthening its grip on the wider NBFC sector.

In terms of Sameer Gehlaut’s plans, he said, “Sameer Gehlaut is the founder of Indiabulls Housing. He has chosen to dedicate his executive time to Dhani, which is the group’s consumer finance and telemedicine app. He has already indicated two years ago that as far as Indiabulls Housing is concerned, at an appropriate time he is happy to hand over control to an institutional investor and he is happy to remain a minority investor. He is a debt-free individual so he has no requirements to divest. His stake is about 21.5 percent.”

“Over a period of time – we already have close to about 50 percent of the company owned by financial institutions and that is the path that we have to continue to follow,” he said.

As a financial entity, one is always in discussions for various forms of capital. “I don’t have a deal on the table that I can be discussing,” he mentioned.

For more, watch the video.

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

RBI eyes stricter NBFC rules: Experts discuss

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

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The Reserve Bank of India (RBI), which released its discussion paper for non-banking financial companies (NBFCs), has proposed a four-layer regulatory framework structure. Further, the RBI has proposed that the entry point for NBFCs be hiked to Rs 20 crore from the current Rs 2 crore.

Santanu Chakrabarti of Edelweiss Financial Services and Gagan Banga, Managing Director of Indiabulls Housing Finance spoke to CNBC-TV18 on the topic.

“I do not see – whatever I have read so far – to be in the least disruptive. As a matter of fact, what I have been saying for a long time, I would like to repeat it again this kind of a formalisation of guidelines and this perceived arbitrage getting reduced between banks and non-banks is hugely progressive for non-banks,” said Banga.

“This seems to be a very progressive discussion paper, it would set the base for NBFCs to become even more relevant than what they are in the system today,” Banga mentioned.

NS Vishwanathan, Former Deputy Governor of RBI also shared his views on the proposed framework.

For full discussion, watch the video…

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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