Ujjivan’s net income rises 133% to Rs177 crore in fiscal 2016
Ujjivan Financial Services says gross non-performing asset increased marginally to 0.15% from 0.07%
Mumbai: Microfinance player Ujjivan Financial Services Ltd’s net income rose 133.84% to ₹ 177.21 crore during fiscal 2016 on the back of growth in portfolios such as microfinance; micro, small and medium enterprises (MSME), and group lending businesses.
The company had registered a net income of ₹ 75.78 crore during fiscal 2015.
“While our MSME lending business grew 96.45% at ₹ 673 crore in the reporting year from ₹ 342 crore in the year-ago period, housing finance business also grew to ₹ 207 crore during the year from merely ₹ 3 crore in the year-ago period," Ujjivan chief financial officer Sudha Suresh told PTI.
The group lending grew 60% to ₹ 4,695 crore in the reporting year. The gross assets under management increased by 64.58% to ₹ 5,388.60 crore, with a repayment rate of 99.81%.
While the return on earning increased by 18.32%, its return on assets grew by 3.66%. However, the gross non-performing asset (NPA) increased marginally during the period to 0.15% from 0.07% in the year-ago period.
Its current net NPA stands at 0.04%. It was due to the fact that we extended our loanbook for the open-market customers with increased risks in certain pockets, Suresh said. Currently, the company’s average cost of funding is at 12.18%.
The company, which is now under the margin cap of the Reserve Bank of India, provides lending at an interest rate of 22.4%. On 2 May, it completed its initial public offering (IPO).
“We raised a sum of ₹ 358 crore through the recently concluded IPO as we had already mopped up ₹ 292 crore through pre-IPO collections. Besides, we earned, ₹ 558 crore through offer-for-sale for our shareholders," she said.
The IPO proceeds will be used for augmenting business growth of the company for the next few years.
“We have plans to raise over ₹ 2,000 crore through debt borrowings. We will diversify sources of funding through commercial papers, non-convertible bonds and sub-debt," Suresh said.
On the company’s plan to go for transition from a microfinance institution to a small finance bank (SFB), she said the SFB is likely to become operational from early 2017. “We are planning to have 80 branches of the SFB during the next nine months, which will be increased to 550 by April next year," she said.
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