L&T Finance, the non bank finance arm of the L&T group, is planning to revise its 2026 target to have a retail loan book of 80 per cent on the back of a 69 per cent growth in disbursement recorded in the financial year ending March 31.
The company officials on Friday said that a goal was set in April 2022 to have an 80 per cent of the asset book as retail loan by FY26 from 51 per cent in FY22 and the company has already reached 75 per cent in FY23.
In absolute numbers, the retail loan book of the NBFC was Rs 61,053 crore in FY23, recording a growth of 35 per cent from Rs 45,084 crore in FY22. Loan disbursed during FY23 was Rs 42,065 crore against Rs 24,901 crore in FY22, a growth of 69 per cent.
“It is expected that we would reach the 80 per cent mark by FY24. Internally we are discussing whether the target can be extended to 90 per cent,” Sachinn Joshi, group chief financial officer of L&T Finance, said in Calcutta on Friday.
“Our intent is to bring down the wholesale business and become a predominantly retail finance company in the long term,” Joshi said. With the retail book growing, its share in the profit after tax mix has increased from 69 per cent in FY22 to 85 per cent in FY23.
L&T Finance Holdings in March had informed the stock exchanges that it has received a clearance from the Reserve Bank of India on the amalgamation of L&T Finance Limited, L&T Infra CreditLimited and L&T Mutual Fund Trustee Limited, wholly owned subsidiaries of the company with the holding company.
Joshi said that the merger process is expected to be complete by the end of the ongoing financial year.
The non bank finance company may also see a marginal rise in the cost of funds as the banks are yet to pass on the 150 basis point rise in rates, with the RBI increasing policy rate by 250 basis points followed by a current pause.
The NBFC has seen a 4 basis point reduction in its weighted average cost of borrowing to 7.46 per cent in FY23.