Ind Bank Housing Ltd. (IBHL) is ‘taking efforts’ to revive its lending operations and has prepared a road map in this direction, a top official wrote in the firm’s 28th annual report.
The road map included restructuring capital, recovering non-performing assets (NPA) and restarting lending operations, wrote Sesha Sai PLVK, managing director, IBHL. IBHL had stopped lending activities in 2000 due to negative net worth and the lack of working capital. Currently, the firm has accumulated losses running to ₹137.58 crore while the capital adequacy ratio was in the negative.
Regarding capital restructuring, Mr. Sai said in the report that the entire outstanding term loan of ₹129 crore would be converted into non-cumulative, compulsorily convertible preference shares for a period of 20 years.
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The capital restructuring proposal was approved by the firm’s promoter and lender. Indian Bank holds 51% in the housing finance subsidiary followed by HUDCO with 25%. IBHL reported a gross income of ₹66.65 lakh for 2018-19 against ₹2.16 crore for the previous fiscal on lower recoveries from NPA accounts. It ended FY19 with a net profit of ₹13.24 lakh (₹1.78 crore). It also had reversed a provision of ₹46 lakh, that was no longer required, the document said.
The annual report noted that the Securities and Exchange Board of India had given its approval for the Real Estate Investment Trust platform, which would help create a ₹1.25 trillion opportunity in the Indian market over time.