I disagree that they might go for QIP. Capital is raised in two ways – debt and equity. Debt/equity ratio is generally over 3x for most lenders but it is < 2x for Aptus. This is also the reason they are comfortable in paying dividends as they have adequate equity buffer. Their target from here would be raise more debt from banks/NHBs instead of raising equity.
@Pulak I see your concern on NHB refinancing. But from what I understand it shouldn’t be a problem for them to secure it this year too. The government is very supportive of financing affordable housing. It was mentioned multiple times in speeches and even in “Final Budget key note”.
Besides their ratings are not bad, look at the credit report. Care assigns AAA to most secure lenders and AA is second to that. Read their rationale behind it.
Yes there are concerns about self-employed borrowers who experience uncertainty in their cash flows, however I personally would take this much risk willingly, particularly given their LTV doesn’t go beyond 50% and avg LTV of whole portfolio is ~40% as most of the portfolio is for HFC where LTVs are <40%. Secondly, SMEs are expected to do good in coming years as government is strongly pushing for them, if you have noticed in this budget too there was a scheme for bank guarantees from their side for SME loans.
As far as geographical diversification goes, they have done pretty good so far and going forward their Karnataka allocation is gonna increase as this region AUM is growing at over 30% vs their traditionally dominant region Tamil Nadu which might be growing at 10-15%.
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