Axis Bank will look at infusing capital into its non-banking subsidiary, Axis Finance. The rapid pace of growth that the subsidiary has seen is the main reason for infusing the capital, said MD and CEO Amitabh Chaudhry.

“Currently we have a dispensary and at the appropriate stage, we will get RBI approval for this. If we can’t, (get approval) then we can tie up a private equity firm,” Chaudhry told. Line of Business.

“Axis Finance is doing very well. It has always had around 20 percent RoE (return on equity). It was a wholesale NBFC and they have increased up to 30 per cent in retail loans,” he added.

The company reported a net profit of ₹364 crore for FY22, and income from operations of ₹1,514 crore. In Q1 FY23, profit after tax was ₹95 crore on a revenue base of ₹471 crore. Total RoE for FY22 was 20.3 percent and for Q1 FY23 it was 15.4 percent.

Assets under management of Axis Finance grew 59 percent year-on-year to ₹19,011 crore as of June 30. Retail loans tripled at ₹6,905 crore, comprising 36 percent of total loan disbursements at the end of June. .

Monetization subsidiaries

Among other smaller branches of private sector lenders, it may also look to inject capital into Axis Securities, Chaudhry said.

Axis Securities posted a net profit of ₹232 crore for FY22. In the first quarter of this fiscal year, profit was ₹39 million, 30 percent lower than the year as the company said it made a “significant investment” in talent during the quarter that impacted profits.

The company, however, saw a 63 percent increase in business volumes during Q1 FY23. The number of new customers added also increased by 148 percent year-on-year, pushing the total number of customers by 18 percent to 43.6 lakh as of June 30.

When asked if Axis Bank is looking to monetize any of its subsidiaries, Chaudhry said not at the moment because the size of these institutions is not big enough.

“We always wanted to keep 100 percent (share ownership) because we first need to increase them. Their ranks have improved but they are still not where we want them to be. Therefore, we have more time to earn income,” he said.

Source link