We are shifting our focus from pure Loan book to AUM: Ravi Bubna, ECL Finance

MUMBAI: ECL Finance plans to attain business growth through a combination of loan expansions and advisory businesses, said said Ravi Bubna, Managing Director & CEO. Loan origination is the company’s forte. Edited excerpt:

Can you please your detail your loan book?

Ravi Bubna: Our current credit portfolio at Edelweiss is Rs 18,000 crore, which includes mortgages and retail finance also. This growth has been achieved while maintaining bad loans at well below the standard norms. Our major product offerings include structured credit and real estate financing which are collateralized through assets and or cash flows.

Which geography are you most active lender?

Ravi Bubna: Right now focus is now on West and South India. We are quite active in Mumbai, Chennai and Bangalore.

How are placed to face increasing competition in loan market?

Ravi Bubna: We welcome the competition. It always opens up the market.

We prefer to stay in the upper end of the NBFC credit market which consists of large & medium players. Edelweiss as an NBFC has a solid capability to offer various asset management structures for different credit products along with ability to distribute effectively.

What is your unique selling proposition?

Ravi Bubna: The biggest USP of Edelweiss is solution-based approach. We normally deal with corporates towards their problems and try finding credit solutions.

The second is the turnaround time along with our robust underwriting capability. It is our forte area.

Third, we have large loan origination capability which helps us in distribution and Sell down.

Who are your borrowers?

Ravi Bubna: Normally we deal with borrowers, who are rated as AA, A+, A. We do not offer unsecured loans. We accept collaterals, which are about 2x-2.5x higher than loan value. The idea is that it should be difficult for a borrower to deal adversely.

Our Net NPA ratio is 0.39%, which is much better than industry average.

What about interest rates and tenure?

Ravi Bubna: Average maturity is 18-24 months.

How are you different compared to other lenders?

Ravi Bubna: We generally try to lend to Clients from where they can elevate to the next level of growth. Our approach is to partner Clients & guide them in the right direction over the long term.

What are your borrowing sources?

Ravi Bubna: Normally, we have mixed pool of borrowings. We take Bank loans while we also raise funds via bond issuances. The rest is mopped up through other avenues like commercial papers, overdraft facilities.

We aim to raise more funds tapping corporate bond market. Besides, we are also looking into raising funds via quasi-equity instruments.

How do you plan your future business growth?

Ravi Bubna: We will attain business growth through a combination of loan expansions and advisory businesses. We will originate loans and distribute it too.

We also have a well established and sizable distribution and advisory business which comprises fixed income markets, debt restructuring & resolution, real estate advisory practice, overall syndication and capital market funding advisory.

There will be overall growth for assets under management. We are now shifting our focus from pure Loan book to AUM.

For example, we will go to markets and syndicate loans with like-minded risk conscious investors & other non-banking finance companies.

Do you have any plan to list your company as a separate entity?

Ravi Bubna: Not immediately. As we ascend over the next few years we may evaluate.

Is the current regulatory Environment conducive?

Ravi Bubna: The regulators have brought significant change so much so that with the current focus on stress resolution it will foster an environment of healthy corporate balance sheets.

The proposed bankruptcy code is one such step in this direction.

The RBI has been a major contributor to overall macroeconomic stability by building forex reserves to nearly USD 360bn, controlling inflation and fiscal deficit and facilitating a health balance of payments situation.

Coordinated policy action on the fiscal and monetary fronts has been the highlight of the last year and I believe this will push rates lower in FY17 as well.

While the accommodative stance of the RBI is expected to be a continuing theme, the refined liquidity framework will play a bigger role in transmitting past rate cuts as well as bringing down lending rates.