Three-fourth of loan book under moratorium: Tata Motors Finance
1 min read 17 Jun 2020, 11:13 AM ISTHeavy commercial vehicle financing accounts for bulk of the company's loan book at an estimated ₹16,000 crore, followed by about ₹12,000 crore worth of financing for small commercial vehicles
PremiumMUMBAI: Tata Motors Finance Ltd (TMF), the captive financing arm of Tata Motors Ltd, has said that about three-fourth of its loan book is under moratorium as of June.
Samrat Gupta, chief executive officer at Tata Motors Finance, told Mint that moratorium has been largely availed by customers with micro, small and medium enterprises or MSME firms.
The company, a wholly owned subsidiary of Tata Motors, has assets under management (AUM) worth ₹37,000 crore and its annual book size is likely to decline this year on extension of moratorium.
"There are two to three things in the book that one needs to understand. When you give a moratorium, the book doesn't go down, because you have given a moratorium, the loan value has been postponed by three more months. So, the book carries on with you," Gupta said, adding that there were customers who have continued to repay loans in the these months as well.
According to Gupta, while average collection for a good month is about ₹1,500 crore, the company has seen repayments worth ₹600 crore.
Heavy commercial vehicle financing accounts for bulk of the company's loan book at an estimated ₹16,000 crore, followed by about ₹12,000 crore worth of financing for small commercial vehicles such as Ace and Magic models. Passenger vehicle financing accounts for about ₹5,000 crore.
The average ticket size of loans disbursed is in the range of ₹8-10 lakh, with an average maturity period of 3.5 years.
TMF has about 4.9 lakh active customers. Gupta expects that more than 50% of customers to opt for working capital and other emergency loans the company plans to offer.
"The working capital loan would be 20% of the existing loan, which we have already given to the customer," Gupta said. "This will serve as a very good pattern for recovery. This will take care of zero to 90 days which means assets which are in books that were either standard assets or non-delinquent assets."
TMF plans to offer opex funding--liquidity against fixed expenses for 3-4 months--restructuring of existing loans for MSMEs, bill discounting for fleet operators, among others.
"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!
