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Informist, Friday, Oct. 25, 2024

--Poonawalla Fincorp: Don't see need to raise equity capital right now

--Poonawalla Fincorp: One-time provisioning in Jul-Sept to strengthen balance sheet

--Poonawalla Fincorp: To launch additional 400 branches in FY26

--CONTEXT: Comments by Poonawalla Fincorp mgmt in post-earnings analyst call

--Poonawalla Fincorp: Looking to introduce 6 new product offerings by Apr-Jun

By Sagar Sen and Gopika Balasubramanium

MUMBAI/NEW DELHI – Seeing huge scope for growth in smaller towns and unexplored pockets, Poonawalla Fincorp Ltd. is looking to launch six more products by June 2026. "From a product portfolio... existing four key products, small ticket personal loan, loan against property, business loans, pre-owned cars, we want to broaden our offering to 10 products. We want to build six additional offerings," Managing Director and Chief Executive Arvind Kapil said at a post-earnings analyst call.

Sharing his views on the company's growth plans, Kapil said personal loan, consumer durable, shopkeeper loans, used commercial vehicles, gold loans and education loans are the new products that are going to be introduced. "Consumer durables is going to be a key pillar for growing our customer franchise," he said.

Moreover, there are significant pockets of prime customers that are underserved in deeper geography and that presents a great opportunity for the non-banking financial institution, Kapil said. In order to tap this under-serviced consumer class Poonawalla Fincorp will look to add 400 more branches by the end of next financial year. "We presently stand at approximately 101 branches and we are ready to expand our footprint by 400 branches over the next year in tier-2 and tier-3 locations consistently with our strength."

Poonawalla Fincorp surprised the market on Friday by reporting a consolidated net loss of INR 4.71 billion for the quarter ended September because of a one-time provision of INR 6.66 billion in its small ticket personal loans book. Overall provisions in Jul-Sept were at INR 9.10 billion, significantly higher than INR 281 million last year, which led to a loss in the quarter. Referring to the one-time provisioning, Kapil said it is a positive move and will strengthen the balance sheet as the company is focussing a lot on risk management. The senior management of the company is confident that no fresh capital is required to support the business at this stage.

The company's shares closed 17.2% lower at INR 297.05 on the National Stock Exchange.  End

Edited by Ashish Shirke

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