L&T Finance Holdings Ltd is expecting to soon mop up ₹300-400 crore by selling loans from its ‘de-focussed products portfolio,’ which comprises car, three-wheeler and commercial vehicle loans.
Dinanath Dubhashi, Managing Director, said: “We tried (to sell loans from the de-focussed products portfolio) over the last nine months but we have not had success….
“The reason for this is that nobody is quite as diversified as we are to buy a diversified 14 product portfolio. So, we have now started slicing and dicing this portfolio.”
LTFH, which is the flagship holding company of the financial services business of the L&T Group, has been running down its de-focussed products with no additional disbursements in this financial year.
While the focussed businesses portfolio has grown 24 per cent year-on-year to ₹57,081 crore in the quarter ended September 30, 2016, the de-focussed products loan portfolio has de-grown 31 per cent to ₹3,817 crore.
With effect from April 1, 2016, LTFHL discontinued financing 14 products (which the company now calls de-focussed products) including cars, three-wheelers, commercial vehicles (CVs), small CVs, diesel generator sets, leasing and receivable discounting.
“In these cases (de-focussed products), either the size of the business was not good enough or the profitability was not there…
“Our first sale (from the de-focussed products loan portfolio) might fructify this month itself, either in the form of a pass-through-certificate instrument or a direct sale…And then next quarter onwards, we will continue that model,” said Dubhashi.
LTFHL’s focussed businesses portfolio comprises rural finance (three products — tractors, two-wheelers, and micro finance); housing finance (two products — developer funding and retail housing); and wholesale finance (two products — infrastructure finance and structured finance).
The company runs its lending businesses through five wholly-owned subsidiaries — L&T Finance Ltd, L&T Infrastructure Finance Company Ltd, L&T Housing Finance Ltd, Family Credit Ltd and L&T FinCorp Ltd.
The investment management and wealth management businesses are operated through wholly-owned subsidiaries L&T Investment Management Ltd (average assets under management: ₹32,667 crore in Q2FY17) and L&T Capital Markets Ltd (average assets under management: ₹12,875 crore), respectively.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.