IIFCL profit surges over three-fold to Rs 325 cr in FY21; NPA eases

Topics IIFCL | NPA | corporate earnings

Representational image

India Infrastructure Finance Company Ltd (IIFCL) on Tuesday reported a more than three-fold jump in its net profit to Rs 325 crore for the fiscal ended March 2021, mainly helped by recovery and reduction of bad loans.

The state-owned infrastructure finance company had earned a net profit of Rs 94 crore on a consolidated basis in the previous fiscal.

At the same time, the standalone profit of the company rose over five times to Rs 286 crore as compared to Rs 51 crore in 2019-20.

During the year (2020-21), the company posted record performance with the highest ever sanctions and disbursements at Rs 20,892 crore and Rs 9,460 crore, respectively, on a standalone basis, IIFCL managing director P R Jaishankar said while announcing annual financial numbers.

The company's asset quality witnessed improvement as net non-performing assets (NPAs) came down to 5.39 per cent from 9.75 per cent.

Going forward, he said, "We will try and bring down the net NPA to 4 per cent by the end of the current fiscal".

The gross NPA of the company too declined to 13.9 per cent from 19.70 per cent in the previous financial year.

With regard to cash recovery in NPAs, he said, it increased to over Rs 625 crore in 2020-21, 92 per cent higher than the previous fiscal.

IIFCL also managed to significantly lower its cost of funds in FY21, resulting in better financial health, Jaishankar said.

Despite the challenges faced in view of the pandemic during the year, he said, IIFCL has managed to grow its standalone portfolio by about 9 per cent.

The provision coverage ratio increased from 50.51 per cent in 2019-20 to 61.24 per cent at the end of March 2021.

On the outlook for business, Jaishankar said IIFCL plans to aggressively capture an increased market share by keeping its pricing competitive and lowering down the base rate to attract more business and further strengthen its portfolio.

"IIFCL is now in the process of bringing in a market-oriented dynamism in all its activities, with an improved credit policy, segmented risk-based pricing, enhanced efforts for recovery, an active treasury management and digitalisation of monitoring of projects for ensuring progress linked disbursements in projects," he noted.

Asked about a merger with proposed Development Finance Institution called the National Bank for Financing Infrastructure and Development (NaBFID), he said, there are no such plans, rather the company has its own growth agenda.

Parliament in March cleared the National Bank for Financing Infrastructure and Development (NaBFID) Bill 2021 to support the development of long-term non-recourse infrastructure financing in India, including the development of the bonds and derivatives markets necessary for infrastructure financing.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel