Muthoot FinCorp looks to close fiscal with 28% loan growth

Muthoot FinCorp, the flagship of the diversified Muthoot Pappachan Group and the third largest pure-play gold loan player, is expecting to close the current fiscal with a full 28 per cent asset growth, a top company official has said. Driven by the surge in gold prices in the first half of the fiscal, the city-based headquartered company’s gold loan assets grew 24 per cent in the first three quarters of the current fiscal to around Rs 17,500 crore, while the group’s lending businesses as a whole has grown to Rs 27,000 crore by end of December 2020, the official said, adding of this real growth is 14 per cent as the rest was boosted by rising gold prices.

“We have been doing better in the current quarter, growing at over 27 per cent, than the previous three quarters and close the year with a total growth of 28 per cent by march-end,” Thomas John Muthoot, chairman and managing director of the group, told on Monday.

The privately held Muthoot FinCorp is the third largest gold loan company after Muthoot Finance NSE -0.35 %, Manappuram Finance NSE -0.54 %. It has around 3,600 branches across the country and the group, which is also into automotive retail, realty, hospitality, IT and green energy apart from running four credit business, employing 27,000.

The group also known as Muthoot Blue has four NBFCs — Muthoot FinCorp which is into gold loans, Muthoot Capital, its listed entity which is into two-wheeler and used car loans, Muthoot Microfin, and Muthoot Housing Finance.

Muthoot FinCorp also does domestic and international money transfer, chits, foreign exchange, insurance sales, wealth management, among others.

Muthoot said despite the fall in gold prices, the company has maintained a healthy asset quality, with gross non-performing assets at 1-1.8 per cent under the gold loan portfolio over the past five years.

As of the December quarter, GNPA and credit cost stood at 1.3 per cent and 0.2 per cent, respectively, he said.

The gold loan portfolio accounts for about 67 per cent of the group’s overall assets (AUM) as of December 2020 which stood at Rs 27,000 crore, and 87 per cent of the group profit.

In the current financial year, Muthoot FinCorp has disbursed about Rs 38,000 crore to 7.5 million customers, of which 4.5 million customers are the nano, micro, and small enterprises, he said.

During the financial year, the company as raised Rs 1,138. 6 crore through public sale of NCDs apart from issuing NCDs via private placement to banks amounting to Rs 1,750 crore and Rs 997 crore via market linked debentures.

Muthoot also said Crisil on Monday upgraded the credit rating of Muthoot FinCorp from A- stable to A+ stable.

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