Business
Poonawalla Fincorp Achieves Significant Milestone of GNPA Below 1% and NNPA Below 0.5% as on 31st May 2024
Business Wire India
* With combined efforts of business growth, prudent credit policies & improved collection efficiency, the GNPA and NNPA numbers have further improved to less than 1% and 0.5% respectively, as of 31st May 2024.
* With combined efforts of business growth, prudent credit policies & improved collection efficiency, the GNPA and NNPA numbers have further improved to less than 1% and 0.5% respectively, as of 31st May 2024.
Poonawalla Fincorp Limited, a non-deposit taking systemically important NBFC focusing on consumer and MSME finance, has achieved a significant milestone of Gross NPA below 1% and Net NPA below 0.5% as on 31st May 2024. It continued to register robust financial performance, demonstrating strong growth in AUM, profitability, and superior asset quality.
Management Commentary:
“Under the dynamic leadership of our Managing Director, Mr. Abhay Bhutada, the company has successfully changed its trajectory to emerge as a leader in the lending space with the biggest transformation over the last 3 years witnessed in the NBFC space, with AUM crossing Rs. 25,000 crore and PAT crossing Rs. 1,000 crore in FY2024. At the time of acquisition in 2021, as per management stated Vision 2025, the target was to achieve Net NPA below 1% in 2025, however, the company achieved Gross NPA below 1% and Net NPA below 0.5% as at 31st May 2024. The company has been able to give stellar results, with pristine asset quality due to its strategic business model, robust risk & governance practices, and improvement in collection efficiency.”
Biggest & Successful Transformation in NBFC sector at a glance
Management Commentary:
“Under the dynamic leadership of our Managing Director, Mr. Abhay Bhutada, the company has successfully changed its trajectory to emerge as a leader in the lending space with the biggest transformation over the last 3 years witnessed in the NBFC space, with AUM crossing Rs. 25,000 crore and PAT crossing Rs. 1,000 crore in FY2024. At the time of acquisition in 2021, as per management stated Vision 2025, the target was to achieve Net NPA below 1% in 2025, however, the company achieved Gross NPA below 1% and Net NPA below 0.5% as at 31st May 2024. The company has been able to give stellar results, with pristine asset quality due to its strategic business model, robust risk & governance practices, and improvement in collection efficiency.”
Biggest & Successful Transformation in NBFC sector at a glance
| Parameters (Standalone) | Dec-20 (Legacy Magma) (Pre-Acquisition) | Mar-24 (Poonawalla Fincorp) (Post-Acquisition) |
| Assets Under Management (AUM) | Rs. 11,631 crore | Rs. 25,003 crore |
| Cost of Borrowing (%) | 9.64% | 8.17% |
| GS3/Gross NPA (%) | 8.23% | 1.16% * |
| NS3/Net NPA (%) | 5.35% | 0.59% * |
| Return on Assets (%) | 0.04% | 5.73% |
| AUM per Employee | Rs. 2.14 crore | Rs. 11 crore |
| PBT Per Employee | Rs. 0.12 lacs | Rs. 68 lacs |
| Collection | Cash | Digital |
| Branches | 255 | 102 |
| Lending Methodology | Physical | Digital |
| New to Credit | Yes | No |
| Data Driven Lending | No | Yes |
| Credit Rating | AA- (CARE) | AAA (CRISIL & CARE) |
| Direct & Digital Business (%) | ~10% | 81% |
| Digital First Approach | No | Yes |
* With combined efforts of business growth, prudent credit policies & improved collection efficiency, the GNPA and NNPA numbers have further improved to less than 1% and 0.5% respectively, as of 31st May 2024.
Long Term Guidance on Financial Metrics (achieved across all parameters)
The company’s performance on the key financial metrics as against its long-term guidance is as under:
| S/N. | Metrics | Range | Actual (Mar’24) |
| 1. | AUM Growth | 35-40% | 55% |
| 2. | Profit Growth | 30-35% | 84% |
| 3. | GNPA | 1.3-1.8% | 1.16% * |
| 4. | NNPA | 0.5-0.9% | 0.59% * |
| 5. | Return on Assets | 4-4.5% | 5.73% |
* With combined efforts of business growth, prudent credit policies & improved collection efficiency, the GNPA and NNPA numbers have further improved to less than 1% and 0.5% respectively, as of 31st May 2024.
