Non-bank lender L&T Finance Holdings (LTFH) on Monday said its board has approved raising of up to Rs 3,000 crore through a rights issue. The lender said details of the rights issue, including price and entitlement ratio, will be determined in due course. Banks and non-banking financial companies (NBFCs) have been raising funds to build capital buffers. NBFCs such as Mahindra Finance and Shriram Transport Finance have raised Rs 3,089 crore and Rs 1,500 crore through their respective rights issues.
“The board approved the offer and issuance of fully paid-up equity shares of the company for an amount not exceeding Rs 3,000 crore by way of a rights issue to the eligible equity shareholders of the company,” L&T Finance Holdings said in a regulatory filing. The capital adequacy ratio of the lender stood at 21.37% at the end of the September quarter (Q2) .
L&T Finance Holdings had earlier reported a 52% year-on-year (y-o-y) rise in its Q2 profits at Rs 265 crore, compared to Rs 174 crore a year earlier. The firm posted increase in the net profit, despite creating additional provisions of Rs 512 crore in Q2. Collections also improved ending September with 95% efficiency levels. Total collections in Q2 were at Rs 10,296 crore, compared to Rs 4,321 crore at the end of the June quarter.
Dinanath Dubhashi, managing director (MD) and chief executive oficer (CEO), LTFH, said that lender was seeing a gradual easing out of liquidity conditions. “Our focus now would be to reduce excess liquidity and bring down the cost of borrowing, “ he said after declaring earnings.
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