Tata Capital expects over 10% growth in credit this financial year

Topics Tata Capital | Retail credit | loans

After showing flat growth in assets in FY21, Tata Capital is expecting its lending arms to grow their loan book at 10 per cent in FY22.


During FY21, its loan book stood at Rs 77,219 crore, compared to Rs 77,610 crore in March 2020.


Company executives said they expect margins plus fees in the range of 6 per cent in the medium term and for the firm to keep a provision coverage ratio 65 per cent, as asset quality profile shows improvement.


Rajiv Sabharwal, managing director and chief executive of TCL, told Business Standard that the company would like to grow its credit book by 10 per cent plus in FY22. TCL has three lending arms — Tata Capital Financial Services (TCFSL), Housing Finance Company, and Cleantech funding.


“Growth (in terms of percentage) will be similar in all these entities. In the cleantech segment, which is in the corporate book, not many projects came up last year (FY21). But this year, I believe there will be more projects as things open up. Growth is also going to come from retail, which now constitutes 65-70 per cent business,” he said.


Referring to control on costs, he said there had been a sharp drop in the cost-to-income ratio (C/I ratio) to 35.9 per cent for FY21 from 40.3 per cent in FY20. It was closer to 50 per cent two years ago.


TCLs’s consolidated total income grew by two per cent to Rs 9,985 crore in FY21 as against Rs 9,791 crore in FY20, while the net profit on a consolidated basis increased by about 280 per cent to Rs 1,126 crore in FY21 from Rs 296 crore in FY20.

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