The Board of Directors of Indiabulls Housing Finance Ltd. (IBH) announced its unaudited financial results for the quarter ended September 30th 2022.
- PAT for Q2FY23 is Rs. 289 Cr, vs Q2FY22 PAT of Rs. 286 Cr.
- PAT for H1FY23 is Rs. 576 Cr, vs H1FY22 PAT of Rs. 568 Cr.
- Balance sheet, loan book and AUM have stabilized. Base formed for ~10% AUM growth in FY23
- Retail disbursals under the asset-light model have increased 9x times in H1FY23 v/s H1FY22
- Since FY2022, retail disbursals of ~Rs. 7,800 Cr have been done under the asset-light model. Disbursals have sharply picked up, retail AUM has resumed growth and asset-light model is earning RoA of 3%+
- Over 1,500 employees added since March 2021
- Book spread has expanded to 3.1% at end H1FY23 as rate increases have been passed on
- Assignment / Securitization / Co-lending constituted 31% of IBH's funding mix as at end of Q2FY23
- In H1FY23, Stage 2 loans assets are down by 26% from FY22, and 39% from FY21
- Gross NPAs at 2.94% in Q2FY23. Net NPAs at 1.70%. Total provisions at Rs. 1,775 Cr [3.0% of loan book], which is 2.6x times of the regulatory requirement. Stage 3 provision coverage ratio at 42%
- Capital adequacy stands at 34% and Tier 1 at 28%.
- Net gearing at 2.5x at the end of Q2FY23. Will remain stable at these levels as incremental business will be done in an asset-light model
- The Company's Liquidity Coverage Ratio stood at 196% against a regulatory requirement of only 50%.
- Board has approved creation of ear-marked pool of fixed deposits in four tranches from Q3FY23 to meet ECB repayments due in Q2FY24. The board has also approved subsequently creating similar ear-marked pools to meet FCCB dues due in Q4FY24
- Opened 11 new branches in H1FY23
- Of the 7 partner banks and FIs, IBH has completed technical integration with 4. Tech integration with all 7 will be completed within FY23 itself
Scaling up of Disbursals under Retail Asset-Light Model
The Company disbursed retail loans of Rs. 4,598 Cr under the asset-light model in H1FY23, scaling up from its quarterly disbursal run-rate of Rs. 1,500 Cr in H2FY22. The Company has completed co-lending tech integration with 4 partners and expect to complete the tech integration with the remaining 3 partners within FY23 itself.
In-line with its guidance, the AUM of the Company is now on the growth trajectory. Under the asset- light model, the AUM will keep compounding while balance-sheet size and on-balance sheet loan book will stay flat or decline sometimes.
Much like in the US where the sell down / securitization market is increasingly getting streamlined, The Company is working towards a multi-bank marketplace where loans seamlessly flow to multiple partner banks. The Company has standardized its documentation across all its partners, and the loan appraisal and on-boarding processes have also been standardized. Along with tech integration, the Company has also put in place a straight pass through mechanism, such that loans approved under the joint policy get seamlessly on-boarded with partner banks.
In fact, with a large public sector bank, the Company successfully completed an end-to-end digital straight-pass-through pilot. Incremental disbursals are now being on-boarded through this straight-pass-through digital platform
Increase in Reference Rate and Expansion of Spreads
Book spread has expanded to 3.1% at end H1FY23 as rate increases have been passed on.
An increasing interest rate cycle is always beneficial for the Company's spreads, as over 99% of its advances are on floating rate, wherein the Company passes on the rate increase almost instantaneously, while a large part of its funding mix is on a fixed rate basis. The rate increases will thus help improve the Company's spreads and NIMs going ahead.
Shares of Indiabulls Housing Finance Limited was last trading in BSE at Rs. 126.00 as compared to the previous close of Rs. 124.25. The total number of shares traded during the day was 832470 in over 6816 trades.
The stock hit an intraday high of Rs. 127.35 and intraday low of 123.85. The net turnover during the day was Rs. 104522186.00.