L&T Finance planning to resume retail bond issuance in H2FY25: CFO Joshi | Company News
Sachinn Joshi, chief financial officer, LTF
As part of diversification of raising resources, L&T Finance Ltd (LTF) is looking to resume retail bond issuances in the second half of the current financial year. The fund-raising through retail bond offerings is likely to be in the region of Rs 400-500 crore in each quarter depending on market conditions and requirements, according to Sachinn Joshi, chief financial officer, LTF.
Joshi told Business Standard that there is already retailisation of the loan side (over 95 per cent of credit); the company would also like to raise funds from the retail segment for broad-basing of the resource pool. The share of retail bonds was just one per cent at the end of June 2024, according to an analyst presentation.
Earlier, the company had issued retail bonds prior to the COVID-19 pandemic to raise over Rs 3,000 crore, Joshi said.
Referring to short-term instruments, he said it is stepping up borrowing through commercial paper (CP), the money market instrument, to take advantage of soft interest rates prevailing in the market. At present, CP forms 8 per cent of total borrowing, and it could go up to 11-12 per cent, he added.
Its weighted average cost of borrowings (WACB) funds moved up to 7.85 per cent in Q1 FY25 quarter (June 2024) from 7.77 per cent in the Q1 FY24 quarter (June 2023). The cost of funding moved up gradually to 7.79 per cent in Q2 FY24, 7.81 per cent in Q3 FY24, and 7.82 per cent in Q4 FY24, analyst presentation showed.
Joshi said a diversified liability mix has enabled containing the increase in quarterly WACB at 3 basis points (quarter-on-quarter) to 7.85 per cent in Q1 FY25.
Its net interest margin (NIM) plus fees and other income improved by 144 basis points to 11.08 per cent in Q1 FY25 from 9.64 per cent in Q1 FY24. However, it moderated from 11.25 per cent in Q4 FY24. Going forward, the NIMs plus fees are expected to be about 11 per cent, the CFO said.
Turning to international fund-raising, he said LTF would draw down from sanctioned lines for external commercial borrowings. It is also preparing for raising money from multilateral institutions and global funds in environmental, social, and governance (ESG) space.
First Published: Jul 17 2024 | 7:37 PM IST
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