Shrugging off problems with its previous promoter, Aadhar Housing Finance is now upbeat about its prospects and expects to see higher disbursements starting this month.

Deo Shankar Tripathi, Managing Director and CEO, Aadhar Housing Finance, said, “We expect the loan book to grow 25 per cent to 26 per cent and disbursements to increase by about 20 per cent this fiscal. We will be better than last fiscal, but I can’t say if I will meet my business plan, which was made about five years ago.”

Faced with liquidity crisis after the default at IL&FS and troubles at Wadhawan Global Capital and DHFL, Aadhar saw negative growth in disbursements last fiscal, although its loan book grew by about 26 per cent over 2017-18.

Speaking to  BusinessLine , Tripathi said that it expects disbursements of about Rs 4,000 crore this fiscal, which otherwise would have been about Rs 6,000 crore. Total disbursements by the company amounted to Rs 3,192 crore last fiscal.

“The growth we had in 2016-17 or 2017-18, may not be there as it is only after June 2019 that we were able to start out business. We will start full scale business from this month. We are fine,” Tripathi stressed, noting that many smaller HFCs are still finding it difficult to raise funds.

Aadhar had about Rs 9,000 crore of assets under management in September last year and it was able to sell its pool to banks and honour commitments and continue disbursements. “Aadhaar did Rs 1,400 crore of disbursements between October 2018 to March 2019 and that was entirely funded by the sale of pool and the refinance from NHB,” Tripathi said.

With the economic slowdown, there is now also some strain on repayments by borrowers and a marginal increase in delinquencies, he noted.  “Till now my NPA and delinquency has been well in control, but from April onwards, I am seeing some distress,” he said.

Aadhar had reported retail gross NPAs of 0.58 per cent last fiscal.

Blackstone's impetus

With its sale to private equity major Blackstone, the affordable housing player now has a comfortable capital position.

Tripathi said that Blackstone infused Rs 800 crore primary equity on June 11, 2019, a day after the management control was transferred to Blackstone. “So on June 11, the company’s leverage or debt equity ratio came down to 3.5 per cent,” he said.

Its capital has now doubled to about Rs 1,700 crore and the capital adequacy ratio is over 30 per cent as against 18.28 per cent on March 31, 2019.

While Aadhar previously also kept about two and a half months equal of outflows as reserve money, under Blackstone, it keeps to have funds equaling a minimum three months outflow at every point of time. “If it is not there, we can reduce the disbursements.” Tripathi said, adding this is more or less in line with what we have been following prior to September 2018.