Latest News | L&T Finance Expects Slower Start to Credit Biz as Economic Activities Gather Pace
Get latest articles and stories on Latest News at LatestLY. L&T Finance Holdings (LTFH) on Thursday said its financing activities may pick up at a slower pace amid opening up of the economy after COVID-induced lockdown.
New Delhi, Jun 11 (PTI) L&T Finance Holdings (LTFH) on Thursday said its financing activities may pick up at a slower pace amid opening up of the economy after COVID-induced lockdown.
It is difficult to estimate the definitive impact of COVID-19 on the operations beyond the first quarter of the ongoing fiscal at this point of time, and the company is closely monitoring the developing situation arising out of the pandemic and resultant restrictions imposed by the regulatory authorities, LTFH said in a regulatory filing.
"Rural disbursements may start slowly as markets gradually open up and home loan/loan against property/real estate /infra finance will be limited to tranche disbursements in Q1 and Q2 FY21," it said.
The company also said that there could be rise in interest costs owing to evolving difficult funding environment.
It said the last quarter of FY20 was estimated to be a fairly normal quarter till about March 10, 2020, however the subsequent nationwide lockdown led to a slowdown in disbursements (resulting in lower fee income and asset book) and collections, across the country.
This has had some impact on the operating performance of Q4 FY20 and the profitability during the quarter was largely impacted due to incremental provisions created as per regulatory requirements in light of the COVID-19 pandemic, the company said.
On the liquidity position, LTFH said the company and each of its lending subsidiaries had proactively maintained adequate liquidity buffer.
"LTFH and its lending subsidiaries continue to enjoy the highest credit rating of 'AAA / A1+' by CRISIL, India Ratings, CARE and ICRA," it said.
On service debt and other financing arrangements: "We have been maintaining adequate liquidity buffer and bank lines to service the outstanding debt if and when they fall due. During April-May 2020, we have been able to raise Rs 1,000 crore of term loans from banks and Rs 5,345 crore through the issuance of NCDs and CPs," it added.
Further, LTFH said there has been no significant impact on the business due to non fulfilment of any obligations by any party to existing contracts or agreements.
"At this point of time, we do not anticipate any material impact on the business, as the full consequences of the pandemic are yet unknown," the company said.
LTFH is a non-deposit taking, non-banking financial institution. The core investment company engages in financing business through subsidiaries Rural Finance, Housing Finance, Infrastructure Finance and Investment Management.
LTFH stock closed 2.38 per cent down at Rs 61.60 apiece on the BSE.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)