homefinance NewsSatin Creditcare eyes 25% AUM growth in FY24; expects decline in cost of funds after ratings upgrade
Satin Creditcare eyes 25% AUM growth in FY24; expects decline in cost of funds after ratings upgrade
HP Singh, Chairman and Managing Director of the microfinance lender expects the cost of funds to decline following a ratings upgrade by ICRA.
Microfinance lender Satin Creditcare Network is targeting growth of over 25% in its asset under management (AUM) in the current financial year.
In an interview with CNBC-TV18, HP Singh, the Chairman and Managing Director of Satin Creditcare Network, also discussed about the potential drop in cost of funds following a ratings upgrade although he refrained from giving an estimate of the decline. The lender's current cost of funds is around 12-12.5%.
Rating agency ICRA upgraded the lender's credit rating to A (Stable) from A-(Stable) for its long-term bank facilities, sub-debt, and non-convertible debentures (NCDs). Satin Creditcare recently infused ₹250 crore in capital funded through a qualified institutional placement (QIP).
The company allotted equity shares to seven institutional investors, including ICICI Prudential Life Insurance Company, Societe Generale and Bandhan Mutual Fund, among others, to raise the funds.
Satin Creditcare has a diverse list of lenders, including PSU banks, private banks, foreign banks, and development finance institutions (DFIs) from abroad. Singh said that this makes it difficult to assess the exact quantum of benefit in terms of costs of funds.
With 70% of the company's loan portfolio concentrated in rural areas, Singh highlighted the stability in income levels and the steady growth in demand in these regions. This strategic focus on rural development is expected to contribute to stable credit costs, which Singh anticipates will remain at a manageable 2%.
Satin Creditcare shares have gained over 50% year to date. The company's market capitalisation is around ₹2,700 crore.
For more details, watch the accompanying video
(Edited by : Shweta Mungre)
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