For Shriram Housing Finance (SHFL), which has completed a decade of operations, the second quarter this fiscal promises to be one of the highest quarters ever in terms of disbursements, says its MD & CEO Ravi Subramanian. In an interview with Mithun Dasgupta, Subramanian says the enterprise would not have to have “significant” loan restructuring going forward as the industry has enhanced. Edited excerpts:
How is the demand for housing loans immediately after the second Covid wave in comparison to the initial one?
After the initial Covid wave, a lot of pipeline transactions just went on hold from March to May. People who came into the industry in June saw a large uptake from July (2020) onwards. In the last monetary year, the third and fourth quarters had been extremely very good for most housing loan players. We also did record numbers as our disbursal last year was 95% more than the earlier year.
This fiscal, there was a slowdown in demands. The choose-up has not been of the similar nature as last year. Nevertheless, in July (2021), the business enterprise was back to last year’s choose levels. Demand for housing has picked up. I just hope that it sustains.
What percentage of housing loan demands are coming from persons who currently personal homes?
There is about 10-15% improve in the quantity of persons who are constructing further rooms in their current homes, which indicates that persons are going in for expansion. We have also seen a lot of persons, who currently personal a home, coming in to get a slightly bigger home and clearly expressing an intent that they would sell off the old home to meet the liabilities. That as well was a 10-15% improve more than the earlier quarters. So, there is an improve, there is a definitive shift towards persons going in for bigger properties.
SHFL’s disbursements for Q1FY22 stood at Rs 221 crore, against Rs 77 crore for the similar period of FY21. What will disbursements look like going forward?
Q1FY21 was a extremely slow quarter. April and May this year was a washout. In June, we had been back to about 80% of our regular disbursal. In July, we had been back to our last year’s numbers. So, we are extremely a lot back on track in June and July, which indicates that business enterprise has picked up considerably. My enterprise has grown by means of Covid-19, in the sense that my numbers just before Covid had been not as higher as there are now. Pre-Covid, one year was a period of investment for us.
We had began transforming the organization, began developing the book, began constructing the distributions. So, we had been on the development path when Covid hit us. Q2FY21 was the initial time our enterprise crossed `500 crore disbursal in a quarter. This year, in July we currently clocked `225 crore disbursal, which was about 30% more than what we did in June. Thus, for the enterprise, Q2FY22 promises to be one of the highest quarters ever, if I go by the July trajectory.
What are the elements that contributed to the development in numbers?
We had transformed the organisation in terms of locations of focus, shoppers segments and the goods that we wanted to launch sometime in Q4FY19. After that, we have been investing in our teams and focusing on six states in south and west, and constructing our books. We aspire to hit about `400-500 crore in about 24 months, which we will. Today, we are one of the biggest housing finance players in terms of development in disbursal, assets beneath management, profitability and the portfolio good quality of the new book. The portfolio good quality of the new book is roughly about 77% of our total book, which is the greatest in class (in cost-effective housing loan) today. We think in slow and steady development.
What was the quantity of loans the enterprise restructured in the initial quarter?
In Q1FY22, we restructured about Rs 72 crore of loans. In the earlier quarter, we had restructured loans of Rs 58 crore. Total, we have restructured roughly 3% of our book, out of which about 1.4% was in existing up to 30 days when we restructured. So, it is not that we only restructured delinquent shoppers and larger bucket shoppers, but also genuine shoppers who had been paying and had been going by means of some strain.
Collections in our restructured book are also extremely very good. In reality, in July, on the new book, roughly 99% of our shoppers paid one EMI at least. I do not believe that we will be restructuring something considerable going forward simply because the industry has enhanced.