Annual Report 2012-13 - India Infoline Finance Limited

ANY RISK ARISING
FROM ANY ECONOMIC
EVENT WITH A
GLOBALLY PERVASIVE
IMPACT CAN HAMPER
THE COMPANY’S
PROFITABILITY
Risk mitigation
IIFL possesses multifarious revenue
streams across product lines and four
distinct businesses, which are inherently
linked to the capital and non-capital
markets.
IIFL’s presence in multiple product
segments serves as a natural hedge
against a downturn in any particular
sector.
The Company’s presence in the
relatively volatile equity segment is
balanced by its presence in the relatively
A FAILURE ON THE PART
OF THE CUSTOMER
TO REPAY IN RESPECT
OF THE INTEREST
OR INSTALMENT OF
PRINCIPAL FOR A
SPECIFIED PERIOD OF
TIME MAY RESULT IN
MASSIVE WRITE-DOWNS
AND ADVERSELY
AFFECT ASSET
QUALITY.
Risk mitigation
Our NBFC loan book comprises almost
entirely of secured lending exercises
against tangible collaterals.
Asset quality in the lending portfolio is
(NPAs) at less than 1%, as on March 31,
2013.
Constant audit checks facilitate the
maintenance of a superior asset quality.
INABILITY TO MEET
THE FUNDING
REQUIREMENTS AT
ACCEPTABLE COSTS
COULD DISRUPT THE
NORMAL FUNCTIONING
OF THE BUSINESS.
Risk mitigation
The Company enjoys diverse funding
sources, widening the lending portfolio
and reducing dependence on any single
source.
The funding is addressed through
a prudent combination of borrowings
(working capital limits from banks), nonconvertible
debentures and commercial
papers.
The Group’s ability to raise long-term
resources at competitive rates is the vital
cog in the IIFL wheel. Case in point: India
Infoline Finance Ltd raised ` 5 bn through
a retail NCD issue in 2012 in only three
days.
Our short term debt program is top
rated A1+ by ICRA. ICRA and CRISIL has
rated our long term debt as ICRA AA- and
CRISIL AA- respectively.
DEPENDENCE ON ONE
SINGLE BUSINESS
MAY DRY UP THE
COMPANY’S REVENUE
STREAM IN CASE OF
MARKET VOLATILITY
Risk mitigation
from the fact that its revenue streams are
well spread out.
Improvements in secured-lending
businesses contribute to the overall
earnings.
Return on net worth for IIFL Finance
increased to 12.1% from 7.6% in the
previous year.
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