REPCO home finance – another Gruh in the making?

@bbarhate : I can answer why Repco is not taking up leverage question.

In fact Repco is increasing leverage but slowly. It doesn’t happen that Repco disburses 2-3,000 cr of loans in a year just because it can. Management has said in past that they are comfortable with growing at 25% in current environment. If economy picks up they’ll like to grow at 35% but would not compromise on quality of loans or cost of operations.

All said and done, Repco will not leverage as much as Gruh. Credit rating agencies look at leverage when they give you a rating. A discussion with one of my friend working in a rating agency revealed that many times when NBFC approaches rating agency, the analysts ask them to get to a certain level of leverage by raising equity if the higher rating is to be given.