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Non-banking finance company IDFC today said it may see a spurt in its non-performing assets (NPAs) to 1-1.5 per cent in the next 12-18 months due to the current slowdown in infrastructure sector.
“We may see our NPL level rising to 1-1.5 per cent in the next 12-18 months given the bad environment,” Managing Director and Chief Executive Vikram Limaye told reporters here.
He, however, added the company has kept building provisions to absorb the impact of any rise in bad assets.
IDFC had reported gross NPA of around 0.32 per cent in the first quarter of the current financial year, which was marginally up over the corresponding period of last fiscal.
On the cost of funds for the company, Limaye said it would depend on the overall liquidity environment.
“Bond yields are currently at an elevated level. Also, short-term money market instruments are at a higher level due to the recent liquidity tightening measures by the RBI. So, the cost of funds will depend on the overall liquidity environment,” Limaye said.
He said total borrowing of the NBFC would depend on the loan demand.
In the first quarter, the company had witnessed its gross approvals declining 78 per cent and its gross disbursements coming down 28 per cent over the corresponding period previous fiscal.
The infra financing company is expecting its overall business growth to be around 10 per cent this fiscal. Limaye also said the company is not facing any asset-liability mismatches now.
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