L&T Finance Holding on Friday said the company was looking to exit from its ₹8,660-crore structured finance and debt capital market (DCM) business. The decision to run down the business comes after in the wake of a mark-to-market hit on account of its exposure to Dewan Housing Finance Ltd.
L&T Finance has classified its structured finance and debt capital market as “defocused" book this quarter, while it turns its focuses on infrastructure finance and infra debt fund. The firm has exited from its supply chain finance business.
Announcing its first quarter results, the company said its exposure to a specific HFC, part of its DCM business, saw a mark down of 50% on overall exposure of ₹567 crore. It had to take the MTM hit after ratings of the HFC was downgraded.
L&T Finance said it is looking to focus on core businesses such as rural lending, housing finance and infrastructure finance, and will look to build two business segments, including SME and consumer loans.
“In order to concentrate better on businesses where L&T Finance has ‘right to win’, it has de-emphasized the structured finance and DCM book, where it is a marginal player, and made them part of the defocused book," the firm in a release.
The NBFC on Friday reported 2% jump in net profit to ₹549 crore in the June quarter against ₹538 crore a year ago.