Speaking to CNBC-TV18, Sunil Agarwal, Managing Director of SE Investments, said that the disbursement growth was at 9 percent on a year-on-year basis. It expects a growth of 15-16 percent this year. Asset quality remained stagnant.
The borrowing from banks was Rs 612 crore, while borrowings from the market were at Rs 95 crore.Below is the verbatim transcript of Sunil Agarwal’s interview to Reema Tendulkar & Nigel D’souza.
Reema: Your net interest income (NII) growth seems to be fairly healthy. Could you walk us through what the disbursements were in Q2? What has been the assets under management (AUM) and what is your forecast for the rest half of the year?
A: The Q2 disbursements were Rs 359.21 crore as against Rs 323.68 crore for the Q2 of financial year 2015-2016. On the half year comparison side, we have disbursed Rs 726.42 crore as against Rs 666 crore in the last half year. So the disbursement growth is about 9 percent and we are looking for a growth of about 15-16 percent. Last year we did about Rs 1,348 crore disbursements. This year we are definitely going to achieve Rs 1,500 crore and we are targeting anything around Rs 1,600 crore.
Nigel: The last time you joined us, you told us that disbursements are likely to grow by around 12-14 percent. If I got that right, you just mentioned that the growth was around 9 percent in the past quarter. What makes you so optimistic that we can see a catch up to that 15-16 percent that you are talking about? And also, could you tell us what the net interest margins (NIMs) were in the past quarter?
A: The optimism that we are expecting to achieve 15 percent. We were able to raise money in the last week of September with the debenture issue when we last had a talk. So, that money is still to be deployed. That money has gone in this month and not in the last month. So, those reflections will start coming in Q3 and the NIMs were around 7 percent; NIMs have remained flat.
Reema: I thought your NIMs historically were in this 8-9 mark, so 7 percent would be lower?
A: Yes, in order to maintain a better asset quality, we are maintaining little lesser NIMs but we are ensuring that the assets slip off do not happen.
Reema: Could you give us some details on your asset quality then?
A: Asset quality has remained stagnant. We have been able to recover few amounts which were written off in past years. So, this year, as compared to last year, the recovery percentage is high by about 0.4-0.5 percent.
Nigel: You were talking about those non-convertible debentures (NCD); it was around Rs 100 crore approximately. Could you give us a few details on that? How will it reduce your cost of funds? Currently, what is the breakup between lending from banks as well as lending from bonds, etc? So, give us that breakup and what kind of an impact this can have going ahead?
A: The borrowing from the banks currently is about Rs 612 crore.
Nigel: Give us the mix. What percentage comes in from banks, how much are you borrowing from the capital market, from bonds, etc?
A: Rs 612 crore is from banks and Rs 95 crore is from the market, which are the NCDs. These are the only two borrowings. However, about Rs 514 crore is the net worth of the company as on Q2 ending. So, this is the breakup.
The bank borrowings are at around 12.2 percent on an average and the market borrowings are costing us 14.5 percent.
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