The Hindu Business Line : Finance cos on a fund-raising spree

Non banking finance companies (NBFCs) are raising huge amount of funds through non-convertible debentures (NCDs) and short-term debts. Two of them are CitiFinancial, which is raising a total of Rs 5,876 crore and G E Money Financial Services Ltd, which is raising Rs 3,225 crore.

Rating agency Crisil has assigned the highest rating of AAA to the NCD and P1+ to the short-term debt programmes for both NBFCs.

According to the Crisil report, CitiFinancial, a subsidiary of Citigroup, has seen a growth of over 54 per cent in its total income for the half year ended September 30.It reported a total income of Rs 807 crore (Rs 524 crore). Its profit after tax rose to Rs 96.7 crore (Rs 82.1 crore), an increase of over 17 per cent.

As on March 31, the NBFC's networth stood at Rs 1,252 crore. CitiFinancial is engaged in retail financing, primarily to finance the sub-prime segment of retail borrowers in personal and consumer durable loans and home mortgage segments.

The Crisil report says improvement in CitiFinancial's net profitability is driven primarily by a shift in the asset mix towards high-margin products such as personal loans and home equity, and by the progressive decline in its borrowing costs.

G E Money Financial Services finances consumer durables, automobiles and two-wheelers. It reported a profit after tax of Rs 54 crore on a total income of Rs 794 crore for the fiscal ended March 31, said the report.

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