Highlights:

The disbursement during the quarter was Rs 694 crore, impacted due to lockdown on account of COVID-19 pandemic. However, on a month-on-month basis, the disbursement registered an increasing trend.

Retail segment contributed 97% of the total disbursement, with 65% disbursed towards lower risk-weighted individual housing loan segment.

The asset under management of the company is maintained at Rs 83495 crore end June 2020, with retail AUM at 82% and corporate at 18% of the assets under management.

On RBI moratorium, the company adopted Opt-in route for accepting customers' request. AUM under moratorium in Phase 1 was 56%, which has got reduced substantially to 39% in Phase 2 as on 30 June, 2020. A sharp drop was witnessed in the retail segment moratorium from 49% under Phase 1 to 29% in Phase 2.

The follow up with the customer have helped to reduce the moratorium book. Roughly 40000 calls made to the customer who had availed for moratorium 2 around 5000 customers had reversed their decision on moratorium.

The company undertook various measures in sourcing, underwriting and collections during the quarter.

The company also initiated in-principle online sanction of loans and is developing a new digital channel for sourcing and reviewing the loan application.

The company has also tightened credit guidelines to further strengthen the underwriting process, including norms on target customer industries, methods of receiving income and tightening key policy parameters.

The company is also working on AI-based voice bot system in the existing resolution setup to facilitate timely EMI repayments.

On the corporate book, the company has created a remedial management group under direct supervision of the Managing Director to focus on faster resolution and effective monitoring of corporate book accounts. A newly formed group has already started showcasing results through resolution of a few corporate accounts.

In case of Ireo Private, the company had disbursed Rs 150 crore and outstanding was Rs 101 crore. The company has successfully got 1 part of a mortgage land auction and received 25% earnest money. The developer has already paid Rs 25 crore in July 2020 and balance amount is expected to come in the next 3 months time. As on date, the principal outstanding have gone down to Rs 69 crore.

In case of Supertech, the company had given the date for auction under SARFAESI. The company is expecting some kind of interest from the market. Promoter himself is showing some interest to resolve the account.

In case of Vipul, the company had a strong battle with the promoter in court. The company has been successful in not letting the court grant stay on action and auction, which is scheduled.

Another big account, Radius, where the outstanding is more than Rs 250 crore. The company is in close consultation and discussion with the co-lender. In the meanwhile, the company has initiated legal proceeding against the company under SARFAESI.

In another big account, the Ornate, the outstanding is Rs 181 crore, and the company has initiated legal proceeding under SARFAESI. The case is now admitted to NCLT, and the company has to join the process under IBC for resolution of the case.

As on 30 June, 60% of corporate book is under principal moratorium. The company has collected almost around Rs 600 crore under moratorium of this book under escrow fund and the promoters have been permitted to utilize this amount.

The company is looking to sell down corporate book and is in discussion with the 2 banks on the same. The company has received sanctions from 2 banks amounting to Rs 352 crore, but again because of COVID, the issue is there, the documentation is not happening, stamp duty is not payable.

Of construction finance book of Rs 10300 crore book under moratorium is around 60% or 58% of which Rs 3422 crore is under construction with less than 50% completion. Out of this, roughly Rs 1000 crore is under NPA and roughly Rs 2290 crore is 0 DPD book.

The overlap between moratorium Phase 1 and Phase 2 is 90%. Only 9% customers have opted Phase 2 but they were not there in Phase 1.

The overall provision coverage ratio is 98% and Stage 3 provision coverage ratio is 40-43%. The corporate book is covered more than 100% at 103%.

During the quarter, the company mobilized Rs 5484 crore through NHB, bank term loan, ECB, CP and deposits.

The company is second largest deposit taking HFC in the country mobilized around Rs 990 crore of deposits and majority of it are public deposits. Average tenure of deposits is 42 months on outstanding basis. Deposit book stands at Rs 16203 crore, which is roughly 20% of total financial resources.

With continued focus on the long-term borrowing, the ALM is comfortable. The company has not availed the option of moratorium with respect to payment obligation to all lenders during the moratorium period.

The company has maintained adequate cash and liquid investments of Rs 7000 crore along with undrawn sanctioned lines of Rs 5000 crore. The company also has built a good pipeline of new prospective borrowings from diverse resources.

CRAR as on June 2020, increased to 18.05% with Tire 1 at 15.33%, much beyond the minimum regulatory Tier 1 requirement of 10%.

The gearing of the company is 8.2% as on 30 June, which has improved from 9.2% as on June 2019.

The Board of the company during the quarter approved its business plan for FY2021. As per the same, company continues to focus on lower risk-weighted assets. The AUM is expected to be maintained in the similar trajectory in FY2021 similar to FY20.

The retail book AUM is expected increase to more than 85%, where the corporate book AUM to reduce less than 15%.

The spread is expected to be in the range of 210 to 220 bps and gross margin of 300 to 315 bps.

With the cost reduction measures, the operating expenditure is expected to reduce by 5% to 10%.

The return on asset is expected to be in the range of 140 to 160 bps, with a lower gearing and higher capital risk assets ratio.

On CEO appointment, the company has authorized Nomination and Remuneration Committee to for identifying the candidate suitable for CEO of the company. The NRC is actively looking for the prospective candidate in the direction and an announcement would be made very shortly.

The company has made a COVID provision of Rs 471 crore with additional provision of Rs 71 crore in Q1FY2021. The company sees these provisions to be adequate.

The company expects a slight margin expansion, while the company will try to pass some of it on to the customer also.

While capital is sufficient, but it don't want its capital adequacy to go down and aims to improve rating and gearing further.

The company is targeting disbursements of Rs 13000 crore in retail, while it will not do any corporate financing in FY2021.