Annual Report 2012-13 - India Infoline Finance Limited

to 2.1% from 3.5% a year ago
mainly due to slowdown in the
manufacturing sector. The services
sector, which constitutes 59% of
the GDP, reported a 7.1% growth
compared to 8.2% a year ago, mostly
due to the lower growth estimate for
trade, hotels and communication
sectors. Per-capita income at
current prices rose by 11.7% to
` 68,757 in 2012-13 from ` 61,564
in the previous year. Growth in total
consumption, including private
consumption fell to less than half at
Investment growth, as measured by
1.7% from 4.4% a year ago.
Segmental overview
Gold loans: India is among the
largest gold consumers in the world
with an annual consumption of 900
tonnes. Over the years, gold loan
to a high acceptance as collateral.
The organised gold loan market
witnessed a robust CAGR of over
55% in India between FY 2008 and
FY 2012; gold loans from banks
witnessed a CAGR of 57.5% and
NBFCs witnessed a CAGR of 98.5%
during the period. Gold loans
disbursed by NBFCs witnessed rapid
growth even as banks dominate this
market (72% market share, March
2012).
Healthcare: The Indian healthcare
sector is estimated to reach US$
100 bn by 2015, growing 20%
y-o-y (source: Fitch). The industry
is expected to touch US$ 280 bn
by 2020 on the back of increasing
demand for specialised and quality
healthcare facilities. For a growing
economy, factors like lifestyle-related
health issues, improving healthcare
insurance penetration, government
initiatives and increasing disposable
incomes enhance optimism. The
country witnessed the establishment
of a world-class pharmaceutical
manufacturing and vibrant
biotechnology industry on the one
hand and growth in medical tourism
on the other, which catalysed health
care spending and scope for related
On the back of relatively low
customs duty rates (9.2% to 25%)
combined with an increasing number
of healthcare centres specialising
in advanced surgery, India offers
substantial opportunities for the
direct supply of high technology,
specialised medical equipment,
products and systems.
The Ministry of Health & Family
Welfare proposes that domestic
funding should be increased to at
least 2% of the GDP in the 12th Five
Year Plan. India’s health sector was
allocated ` 37,330 crore in budgetary
estimates for 2013-14, a hike of
8.24% over the previous year.
Housing loans: India’s housing
loan book is expected to witness a
22% CAGR during 2013-15 for the
following reasons (estimated by
CARE Research):
Softening of average borrowing
rates
Under-penetrated housing loan
market (with mortgage as a
percentage of GDP at 9% versus
20% in China and 77% in USA)
Continued traction towards Tier II,
III & IV cities/loans less than ` 25
lakhs
Customised product offerings
Loan against property: Getting
loans against collateralized property
are cost-effective. Financiers
exercise adequate diligence in
property appraisal and offer up to
70% of the value as loan. In this
secured loan (collateralised), the
customer is eligible for a higher
amount compared to an unsecured
personal loan after paying
administrative and processing fees
(usually 0.5-1.5% of the loan value).
Typically, the tenure for such a
loan is one to nine years, but some
companies extend it to 15 years if the
loan amount is high. The interest rate,
from 12-16%, which makes them
cheaper than personal loans.
Loan against capital market
instruments: With consumer
spending on the rise and loans
getting expensive, individuals are
shares fall under this category.
The advantages here include
convenience and immediate liquidity.
The growth in the retail loan market
is the result of a rise in consumer
spending. Loan against shares can
be obtained by pledging shares
owned by the individual with the
lending agency. The performance
of this product depends largely
on the performance of the capital
markets. The volatility in the markets
and negative sentiments impacted
product performance in 2012-13.
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