Unsecured loans | long term traction

July 27, 2011 ? 7:18 am

Larsen & Toubro Promote (LT), LT Participations of Finance, through its subsidiaries, operates a variety of? Financial products and services. Among these projects, LT Infrastructure Finance Infrastructure Development. LT loans to finance to individuals and businesses to purchase equipment, supplies, and capital market products. The other principal subsidiaries, LT Investment Management acts as investment and asset management space.

IPO proceeds, the RS 485 crore for the capital base of Rs 515 LA Infrastructure and the Chief Financial Officer Director LT crore to improve the future growth of these businesses for funding. Rs 345 crore, the company also restore the inter-corporate deposits is its parent company, LT.

Although net interest margins higher (NIMS), asset quality and sound portfolio of finance companies stand? The company in a good position, analysts estimate, LT Finance Holdings, is capable of doing? Higher ratios yield a new generation. Said Apurva Shah of Prabhudas Lilladher, "LT Finance Holding is a scalable business model and growth opportunities in these sectors is still high. Return on equity improved further to 16-18 percent from the current 15 percent. "

Generally, investors in the long term to apply.

Concerns ASSETS
The company gets a lot of influence on the brand of the parent company and the information domain. This is the point size of India's network of the presence of 837 (including 500 in rural areas), is comparable to that of his peers. The loan portfolio is also widespread, which offers an advantage over other NBFC, as most of these foods on specific sectors such as gold loans (Manapurram and Muthoot Finance), vehicles (Shriram Transport) and power (REC, PFC).

In addition, in March 2011 as microfinance institutions (MFIs) accounted for nearly 4.5 percent (RS 460.2 crore) of total retail sales finance business loans unsecured LT, "the book. While that 'there is no APM in the book loan until March 2011 due to rising defaults in Andhra Pradesh, asset quality in this segment may be under pressure. The percentage of 29 for infrastructure loans LT in the energy sector, so that any delay in this region can affect the economy.

Since then the company has not made a relatively low cost of deposits is subject to a senior interest rate on banks and NBFC. It may, however, benefit from the methods of financing such as loans on the outside, infrastructure bonds, etc. Since, LT, LT Finance Infrastructure Finance to enjoy good rankings of credit quality, will help fund a source of competitive interest rates, thus protecting their margins. In addition, the leverage of public financial institutions and financial condition Infrastructure Company (LT granted Infrastructure), buy a low-cost financing.

BUSINESS
The company focuses on the financing of income generating assets in high growth segments of the rural infrastructure, and where it has a high credit check, and the valuation of assets and recovery mechanisms. This is reflected in the high growth rates over the past two years, and lower non-performing assets (NPA), consolidated (0.67 percent of FY11).

Strategy of focusing on income and asset quality will help financial professionals consistently over the long term, even if it is growing rapidly. So far, the company recorded revenues and solid earnings growth. The loan portfolio grew by 59 per cent of Rs 17 crore in FY11 506 Nims is again stable around 7.8 percent over the past two years. Since the interest rate increase scenario, analysts believe that the margins may be affected by 50-70 basis points (bps) during the current fiscal year.

Tags: unsecured loans

Source: http://refinanceloanbank.com/unsecured-loans-long-term-traction/

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