Manappuram Finance to maintain 13% NIM in current fiscal

MUMBAI: Pure-play gold loan player Manappuram Finance is hopeful of maintaining its net interest margin ( NIM) at around 13 per cent in the current fiscal despite a rise in cost of borrowing, a top company official has said.

"Our cost of borrowing is around 12.5 per cent on an average and despite rise in the borrowing cost, we hope to have a slightly higher margin at 13 percent for the fiscal," Manappuram Managing Director I Unnikrishnan told PTI here.

The yield on advances for the Kerala-based gold finance company varies from around 22 to 25 per cent.

He said margin is not under pressure as higher cost is partially passed on to consumers.

Referring to fund raising, Unnikrishnan said the company may raise around Rs 500 crore of debt through a public offer or private placement in the last quarter to support its business growth.

"We may raise Rs 400-Rs 500 crore of debt. However, we are yet to decide whether it should be private placement or public offer of non-convertible debentures."

About gold prices, Unnikrishnan said rates may rise further in an uncertain economic environment. "We don't see a downward trend in gold prices going forward. Rather, it should increase as safe haven investment option for investors."

Gold prices are now hovering around Rs 28,000 per 10 gram, a 30 per cent rise over the past one year.

Manappuram plans to grow its loan book by around 34 per cent to Rs 12,000 crore in the fiscal from Rs 9,000 crore disbursed in the June quarter.

The company posted 125 per cent growth in net profit at Rs 135.30 crore in the quarter ended September.

Source: EconomicTimes