Asirvad Microfinance is contemplating possibilities of bringing in a economic companion and going public in due course, a major official of the enterprise mentioned. However, its is not in a hurry provided the existing atmosphere and is adequately capitalised at present to meet its development, VP Nandakumar, chairman of Asirvad Microfinance, told FE.
Manappuram Finance took more than the Chennai-based enterprise in February 2015 and at present has a 94.78% stake.
“Manappuram Finance is very well capitalised today and we don’t have requirement for growth capital. But, our capital allocation policy formulated by the board stipulates that the incremental capital allocation for unsecured lending should not exceed 10% of the total allocation. This decision has been taken from a risk management perspective. It is in this context that we have considered raising fresh equity capital in Asirvad by bringing in a financial or strategic partner and listing on the stock exchange in due course,”
-Nandakumar mentioned.
“The fact is that the microfinance business has very high growth potential and therefore a larger appetite for growth capital. Asirvad’s AUM has multiplied manifold since our acquisition in 2015,” he added. The microfinance company’s existing capital adequacy is more than 25% and its net worth exceeds Rs 1,000 crore.
Assets beneath management (AUM) grew 17 instances in 5 years to touch Rs 5,500 crore by the finish of FY20. In February 2015,when Manappuram had acquired the enterprise, the AUM was about Rs 300 crore.
In FY21, the pandemic-induced slowdown impacted development and there was a marginal erosion in AUM to Rs 5,357 crore as of Q3FY21.
“Our collection efficiencies improved significantly over the past few months, going above 100% of billings, as past dues are also getting collected. It had reached 99% in December 2020. However, with India now in the midst of a difficult second wave of the pandemic, we may have to wait before we can make an accurate assessment of where we stand,” Nandakumar mentioned.
Regarding expansion, he mentioned in line with danger management policy, the enterprise has capped portfolio concentration at the state level to beneath 10% and at 1% for the district-level exposure. “Currently, Asirvad has more than 1,047 branches in 24 states. We are now present in most locations with business potential. We continue to add locations as and when warranted. Our focus is on achieving profitable, diversified and sustainable growth,” Nandakumar mentioned.
The enterprise reported a net profit of Rs 17.7 crore for the third quarter of FY21 as against a net profit of Rs 71.21 crore in the year-ago period.