Manap­pu­ram sees bor­row­ing costs ris­ing

Mint ST - - PLAIN FACTS -

with the rest in mi­cro­fi­nance, af­ford­able hous­ing, com­mer­cial ve­hi­cles, two-wheel­ers and small and medium en­ter­prise (SME) fi­nanc­ing.

“Nearly 75% of the AUM is in gold loans and a ma­jor­ity of it is in three-month gold loans, which is re­deemed in 50 days be­cause of pre-clo­sures. As our av­er­age bor­row­ing pe­riod is over one year, our ALM (as­set li­a­bil­ity man­age­ment) is pos­i­tive,” Nan­daku­mar said in a phone in­ter­view.

Loans in mi­cro­fi­nance also tend to get re­paid in 18 months, though the con­tract pe­riod is 24 months, he said.

“We have not faced prob­lems in get­ting com­mer­cial pa­pers (CPS) and bank fund­ing re­newed on time. The only thing is that we are get­ting it at a higher cost be­cause of the mar­ket con­di­tions,” said Nan­daku­mar.

At present, of Manappu-

Mar­ket tur­bu­lence driv­ing up costs ram’s Rs11,354 crore to­tal bor­row­ings, a ma­jor­ity orig­i­nated from banks (57.4%), while the rest came from CPS (25.6%), sub­or­di­nated bonds (0.1%) and non-con­vert­ible deben­tures (NCDS) at 16.7%.

The lender re­ported a con­sol­i­dated net profit of ₹221.4 crore in the Septem­ber quar­ter of FY19, up 40% year-onyear (y-o-y).

Its net in­ter­est in­come stood at ₹697 crore in Q2 FY19, up 18.7% y-o-y.

Manap­pu­ram also plans to re­duce its de­pen­dence on gold loans and thereby re­duce its gold loans as a share of to­tal AUM to 50%.

“We are mov­ing in a tar­geted man­ner and cur­rently around 25% of our port­fo­lio is non-gold and in an­other 10 years, we want to make it 50:50 be­tween gold and the rest of the port­fo­lio,” ex­plained Nan­daku­mar.

Fi­nance min­is­ter Arun Jait­ley said on Thurs­day Master­card and Visa were los­ing mar­ket share to do­mes­tic pay­ments net­works, months af­ter Master­card com­plained to the US govern­ment that Prime Min­is­ter Naren­dra Modi was us­ing na­tion­al­ism to pro­mote a lo­cal ri­val.

Jait­ley spoke about the surg­ing growth of Ru­pay and Uni­fied Pay­ment In­ter­face (UPI), which al­lows swift in­ter-bank fund trans­fers, on the sec­ond an­niver­sary of Modi’s shock de­ci­sion to re­place high-value bank notes in a bid to flush out un­taxed wealth.

Modi has said when In­di­ans use Ru­pay they were serv­ing the coun­try as its trans­ac­tion fees stay within In­dia and could help build roads, schools and hospi­tals, an en­dorse­ment that has wor­ried Pur­chase, New York-based Master­card, which is the world’s sec­ond-largest pay­ments pro­ces­sor.

“To­day Visa and Master­card are los­ing mar­ket share in In­dia to in­dige­nously de­vel­oped pay­ment sys­tem of UPI and RU­PAY Card, whose share have reached 65 per­cent of the pay­ments done through debit and credit cards,” Jait­ley said in a Face­book post about the var­i­ous re­sults of the note scrap­ping ex­er­cise, known as de­mon­eti­sa­tion.

Visa de­clined to com­ment. Master­card did not re­spond to an email seek­ing com­ment.

Ru­pay process pay­ments be­tween banks and mer­chants for pur­chases made with credit or debit cards, while UPI in­stantly trans­fers funds be­tween two bank ac­counts linked to mo­bile phones. Jait­ley was re­fer­ring to the vol­ume of trans­ac­tions, not the value.

Though Ru­pay, owned by many In­dian and for­eign banks, ac­counts for more than half of In­dia’s 1 bil­lion debit and credit cards, in­dus­try sources say Visa and Master­card still process the vast ma­jor­ity of the value of pay­ments trans­ac­tions in the coun­try. In­dian pay­ments

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