Manappuram sees borrowing costs rising
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