Highlights:

The company took measures to curtail the impact of COVID-19 and immediately and seamlessly shifted to work-from-home situation, while using technology to respond to customers during the lockdown.

Collection was hugely impacted earlier, while the company enhanced its collection efforts by using cross-functional teams.

However, due to the lockdown, the company could not complete various transactions including property possession, auction, fee and collection, etc.

The company is undertaking various measures to manage the current scenario and scale up in future. The company is increasing its digital footprint and sourcing as well as sanctioning of loans and enhance digital interventions and underwriting, collection and other functions.

Based on the experience gathered out of COVID-19, the company is in advanced stage of implementing a seamless system for customers, helping in reducing the paperwork.

Considering the current scenario, the company has tightened underwriting policy for both retail and corporate book.

Another focus of the company is on reducing costs using various measures like no new hiring, rationalization of branches and offices, negotiation of rents, evaluating work-from-home options etc.

On the borrowing, the company continued to mobilize long-term resources through bank term loans, ECB deposits, NCDs, securitization via direct assignment route, etc.

The company is second largest deposit taking agency in the country and the company mobilized Rs 9000 crore of deposits in FY2020. The public or the retail deposit account for 87% of the total deposits with average tenure of 41 months. Deposits book stands at Rs 16470 crore which is 20% of total financial resources.

With continued focus on the long-term borrowing, securitization through direct assignment and sell-down of corporate finance assets, the company has extended moratorium for customers, but the company has not availed the option of moratorium for its payment obligation to bank during the moratorium period.

The company has maintained excess cash and liquid investments of roughly Rs 5800 crore as on 5 June, along with undrawn and sanctioned lines of Rs 4500 crore.

CRAR as on 31 March 2020 increased to 17.98% with Tier 1 at 15.18%, while the gearing of the company has improved to 8.5% from 9.6% end March 2019.

The assets under management stood at Rs 83346 crore with share of retail loans being 82% and corporate being 18%. Geographically, west has largest share of 41% of AUM, followed by South at 30% and North at 29%. The company has limited presence in East, with 3 branches, 2 in Calcutta and one in Bhubaneswar, which forms part of North zone.

As on 5 June 2020, approximately 56% of Stage 1 AUM has opted for moratoriums whereas under Stage 2, approximately 31% of the AUMs have opted for moratorium, indicating a sharp drop in customers requesting the moratorium.

Retail loans under moratorium under Stage 1 accounts for 49% of retail loans AUM and 20% under Stage 2, representing over 50% of the retail customers have not opted for moratorium in the Stage 2.

The corporate book under moratorium is almost around 80% to 90%.

With the objective of optimizing the capital consumption, the company has focused on disbursing in the retail segment that contributed 92% of the total disbursement, of which 59% was disbursed towards individual housing loan segment.

On an overall basis, the individual housing loans constitute 58% of the AUM, retail loan against property, constitute 20% and retail non-residential premises loan is 4%.

On corporate loan book, the exposure has reduced to 18% from 22% a year earlier this comprises 12% construction finance, 4% corporate term loan and 2% lease rental discounting.

During the year, the company sell down corporate book worth Rs 2300 crore. As on 31 March 2020, corporate book is spread across 141 union developers, down from 169 as on 31 March 2019. The top 20 developers with 63 loan accounts contribute around 64% of corporate book. During FY2020, principal repayment started for 69 corporate financing loans. The amount collected in these facilities during the principal moratorium period was Rs 642 crore.

As on 31 March 2020, the Stage 2 of the corporate book is at around Rs 900 crore, which is 18% lower than the Stage 2 as on 31 March 2019. This includes loan accounts that moved into next bucket due to significant increase in credit risk.

The company has created sufficient provision of 28% in Stage 2 compared to 15.2% a year earlier.

In May 2019, the company identified about 5 accounts as stressed. And out of these 5 accounts, 4 accounts are now moved to Stage 3 that is NPA.

In Idea Private Limited, the company has disbursed Rs 150 crore and the current outstanding is Rs 101 crore with provision of roughly 40%. The company through the legal action has successfully got one part of the mortgage land option, and the company received 25% money and in the next 2-3 months time, it will get the remaining amount.

Supertech account has moved to NPA, and the company is holding more than 50% on provisions with outstanding at Rs 244 crore.

In Ornate, the company has exposure of Rs 181 crore.

In Radius, the company has outstanding at Rs 259 crore. The provision is around 50%. The company has initiated legal proceedings against the company under SARFAESI.

NPA in the LAP book is roughly 1.6%.

Gross NPAs as on 31 March 2020 is 2.29% on the AUM, around 2.25% on the loan book.

As on 31 March 2020, total provision to asset stands comfortably at 2.61%. The provision coverage ratio for Stage 3 has moved to 36% as on 31 March 2020 compared to 20.95% as on 31 March 2019. The Stage 3 provision coverage ratio for the corporate book is 42.2%, and retail is 25.4% as on 31 March 2020.

Impairment on financial instruments and write-offs in the year are at Rs 1251 crore, including COVID-19 provision of Rs 471 crore as compared to Rs 189 crore provision that the company made in FY2019.

With regards to capital raising, the company feels rights issue is the best option in the current situation.

PNB has given a commitment. PNB will continue to remain a promoter of the company and its stake will not fall below 26%.

The application alone in April 2020 were around 1,300 applications which moved up to 2800 applications in May 2020 and the company is confident it will further go up in June 2020.