L&T Finance plans to raise Rs 3,000 crore

L&T Finance plans to raise Rs 3,000 crore

The non-banking arm of Larsen & Toubro (L&T), L&T Finance Holdings has received board approval to raise Rs 3,000 crore via rights issue.
It is interesting to note that the approval for fund raising has come within few days of the Reserve Bank of India (RBI) notification allowing lenders and NBFCs jointly lend. This move is expected to help improve the flow of credit to the underserved sections of the economy. RBI issued guidelines under the co-origination model.
Last Thursday, L&T Finance Holdings announced a 52% rise in its September quarter profits at Rs 265 crore versus Rs 174 crore a year earlier helped by better than expected revival in its rural and infrastructure business post opening up of the economy.

It recorded its best ever monthly disbursements in the rural business and a strong pick up in infrastructure disbursements.
It has also recorded improvement in its gross stage three (GS3) loans which fell Rs 825 crore over last year. The GS3 ratio at the end of the September quarter was at 5.19% versus 5.98% a year ago.
L&T finance also created additional provisions of Rs 512 crore in the September quarter and is now carrying total additional provisions of Rs 1757 crore.

Overall disbursements fell sharply to Rs 7129 crore versus Rs 9779 crore over last year. The rural finance business contributed the bulk of disbursements at Rs 3607 crore followed by infrastructure finance at Rs 2908 crore. Home loan growth was tepid with disbursements at Rs 614 crore at the end of the September quarter versus Rs 2032 crore last year.

While farm loans grew 59% and infra loans grew 6% all other loans contracted. Real estate saw the sharpest contraction at 86%, followed by micro loans at 52% and home loans at 50%.
Collections also improved ending September with 95% efficiency levels. Total collections were at Rs 10,296 crore versus Rs 4321 crore at the end of the June quarter.

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