Do not see any loss on IL&FS exposure, says L&T Finance Holdings
L&T Finance Holdings saw a decline in its disbursement growth by 20 percent year-on-year (YoY) and 18 percent quarter-on-quarter (QoQ) in the third quarter of FY19.
Elaborating on the firm's third quarter performance, Dinanath Dubhashi, managing director and CEO of L&T Finance Holdings, said that due to liquidity crisis, the company's weighted average cost went up to 8.5 percent in Q3 versus 8.33 percent in Q2 but the company was able to pass on the increase in cost of funds completely, which is why QoQ net interest margins remained steady at 5.01 percent.
“Liquidity has been a problem but the company has handled it well,” he said.
With regards to IL&FS exposure, he said, "It is Rs 1,800 crore to IL&FS’ SPVs- that is six road SPVs but all of them are operational. Out of these 6 road projects, 4 are annuity projects, where money comes directly from the governments and 2 are toll projects." “So, the escrow accounts are quite full and as of December 31, each of these accounts were absolutely current.”
He said, even in a worst case scenario, they do not see any loss given default and since they have already moved to IndAS, there is no need for provisions.
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