HYDERABAD, JULY 22:
L&T Finance Holdings Ltd today said the company has an open mind on foray into the banking business and awaiting regulatory guidelines on opening up of new banks.
Addressing newspersons here today ahead of the initial public offer next week, Mr Suneet Maheshwari, Chief Executive L&T Infra, said: “We look at growth opportunities wherever they come from. If it presents an opportunity to open a bank we will look at it. However, at the moment, it is too premature.”
“The investments we made into banks such as City Union Bank was in the form of portfolio investments and provide synergies for growth,” he explained.
Referring to their exposure to microfinance institutions (MFIs), he said: “L&T Finance has been lending to MFIs as we believe that this sector has immense potential to serve the unbanked section of population.”
“Notwithstanding recent developments and new laws and regulations in the MFI industry in the country, and in particular in Andhra Pradesh, we continue to believe in the medium and long term growth prospects of the MFI industry. However, in the short term, and owing to new laws and regulations and decline in collections from customers of microfinance in Andhra Pradesh, we have reduced disbursement of loans in general,” the L&T prospectus said.
However, Mr Maheshwari mentioned “the banks portfolio of MFI is generally doing well as the exposure is across eight States. However, we are cautious.”
“L&T Finance is also looking at infusion of funds into its arm India Infrastructure Developers Ltd to cater to new business segments. We may also consider infusing Tier II Capital in L&T Finance Holdings at a later date,” he said.
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