Fuller ton to raise ~100 billion to fund lending operations

Fullerton India Credit Company Ltd, the Temasek-backed finance firm, plans to raise ~100 billion in 2018-19 financial year to fund lending operations.

Rajashree Nambiar, CEO and MD of Fullerton India, said borrowings will be through a combination of bank lines, bonds, commercial papers and securitisation. The company raised about ~70 billion in the 2017-18 financial year.

Like many financing firms and housing finance outfits tapping retail investors to raise money through bonds, Fullerton may also issue securities ( bonds) to small investors. “We are considering retail options too, in the second half,” said Nambiar.

According to a presentation on FY18 results, the company raised ~69 billion through bonds and non- convertible debentures (NCDs), up from ~54 billion in FY17.

Assets under management (AUMs) rose 36 per cent in FY18 to ~157.75 billion at the end of March 2018, from ~115.97 billion at end of March 2017.

Almost one-third (33 per cent) of its business comes from rural areas—17.9 per cent from group loans and 15.5 per cent from business loans. Personal loans also constitute 33.3% of business—in which share of credit to salaried class is 23.2 per cent and to business class 10.1 per cent.

Loans against properties is substantial at 26.1 per cent. Commercial vehicle loans account for about 7.2 per cent.

The southern region leads the pack in the spread of business across regions, with 36.5 per cent, followed by the west with 32.7 per cent and north with 27.5 per cent. The share of the eastern region was quite small at 3.3 per cent. It had 559 branches, with close to 2 million customers in March 2018.

Fullerton has pegged the mediumterm capital requirement at over ~40 billion. Temasek is a Singapore government-owned company.

According to rating agency Crisil, Fullerton Financial Holdings (FFH), the holding company of Fullerton India, has demonstrated its commitment towards its Indian arm during stressed times.

It has regularly infused growth capital in the company.

Since 2007, FFH has infused around ~20 billion with over ~6 billion being infused in 2009-2010, during the stressed environment.Its capital adequacy ratio was 18.9 per cent with Tieri of 15 per cent in March 2018.

During 2016-17 and the first six months of 2017-18, profitability was affected by demonetisation.

This resulted in an increase in delinquencies, especially in the rural portfolio. Yet, profitability improved in FY18.

Net profit for 2017-18 increased to ~3.54 billion from ~2.14 billion in 201617. Revenues in 2017-18 rose to ~17.76 billion from ~16.08 billion in the 2016-17 financial year.

Since 2007, Fullerton Financial Holdings, the holding company of Fullerton India, has infused around ~20 billion with over ~6 billion being infused in 2009-2010, during the stressed environment