Repco Home Finance Limited (RHFL) has released its financial results for the second quarter, revealing a mixed performance with revenue growth and a slight decline in profit.

Revenue Growth and Profit Decline

For Q2, RHFL reported a total income of ₹446.00 crore, marking a 4.2% increase from ₹428.00 crore in the same period last year. However, the company's net profit decreased to ₹106.90 crore, down from ₹112.50 crore in the previous year's Q2, representing a 5% year-over-year decline.

Loan Book and Asset Quality

The company's overall loan book stood at ₹15,033.00 crore as of September 30, showing a 7.7% growth from ₹13,964.00 crore a year ago. RHFL's asset quality showed improvement, with the Gross Non-Performing Assets (GNPA) ratio decreasing to 3.16% from 3.96% in the previous year. The Net NPA ratio also improved slightly to 1.50% from 1.59% year-over-year.

Business Performance

RHFL demonstrated strong growth in loan sanctions and disbursements:

• Loan sanctions increased by 30.2% to ₹1,206.00 crore, up from ₹926.00 crore in the same quarter last year.
• Loan disbursements grew by 23.3% to ₹1,069.00 crore, compared to ₹867.00 crore in the same period last year.

Financial Metrics

The company maintained healthy financial ratios:

• Net Interest Income (NII) grew by 7.5% to ₹201.00 crore from ₹187.00 crore in the previous year's Q2.
• The loan spread remained stable at 3.4%.
• Return on Assets (ROA) stood at 2.9%, while Return on Equity (ROE) was 13.5%, compared to 3.3% and 16.0% respectively in the same quarter last year.

Loan Portfolio Composition

As of September 30:

Capital Adequacy and Distribution Network

RHFL maintained a strong capital position with a capital adequacy ratio of 36.88%, well above the regulatory minimum of 15%. The company's distribution network expanded to 203 branches and 31 satellite centers across 12 states and one Union Territory.

Mr. T. Karunakaran, Managing Director and CEO of Repco Home Finance Limited, commented on the results, highlighting the company's growth in loan sanctions and disbursements, as well as the improvement in asset quality.

While Repco Home Finance has shown resilience in its loan book growth and asset quality improvement, the slight decline in profitability may warrant attention from investors and stakeholders in the coming quarters.

Repco Home Finance , a prominent player in the housing finance sector, has received a significant boost from its shareholders. The company announced that its shareholders have approved an ambitious fundraising plan totaling ₹2,500.00 crore through private placement.

Fundraising Details

The approved plan encompasses two key financial instruments:

1. Non-Convertible Debentures (NCDs): The company aims to raise ₹1,500.00 crore through NCDs.
2. Commercial Papers (CPs): An additional ₹1,000.00 crore will be raised via CPs.

Both the NCDs and CPs will be issued on a private placement basis, indicating that the company is targeting institutional or high-net-worth investors for this fundraising initiative.

Strategic Implications

This substantial fundraising approval signals Repco Home Finance's intent to strengthen its financial position and potentially expand its operations. The infusion of ₹2,500.00 crore could provide the company with the following advantages:

• Enhanced Lending Capacity: With additional funds, Repco Home Finance may be able to increase its loan disbursements, potentially capturing a larger market share in the housing finance sector.
• Improved Liquidity: The fundraising could bolster the company's liquidity position, providing a cushion against market volatilities and enabling it to meet its short-term obligations more comfortably.
• Diversified Funding Sources: By utilizing both NCDs and CPs, Repco Home Finance is diversifying its funding sources, which can lead to a more balanced and resilient financial structure.

Market Response

The shareholder approval for this significant fundraising plan may be viewed positively by the market, as it demonstrates investor confidence in Repco Home Finance's growth strategy and financial management.

As the housing finance sector continues to play a crucial role in India's economic landscape, Repco Home Finance's move to bolster its financial resources could position it favorably to capitalize on emerging opportunities in the market.

Investors and market analysts will likely keep a close watch on how Repco Home Finance deploys these funds and the subsequent impact on its business performance and market position in the coming quarters.