Indiabulls Operating Profit Plummets 90%

Mortgage lender Indiabulls Housing Finance posted a fourth quarter post tax loss and its operating profit fell more than 90 percent as the company sold down loans to raise liquidity as financial markets and banks turned wary of funding shadow bans. But the company said it has comfortable liquidity to pay up maturing bonds and loans in the coming quarter and it planned to raise more than Rs. 2,000 crores in a share sale, joining the band of financial companies such as Bajaj Finance, Axis Bank and others in raising equity buffer. The non-bank lender shrank its loans by as much as 24 percent to Rs 69,676 crore in the quarter from Rs 91,500 crore during the same period last year, a drop of nearly Rs 22,000 crore. Its total comprehensive income after tax was a loss of Rs. 64 crores in the March quarter compared with a profit of Rs. 949 crores a year ago. Its pre-tax profit plunged to Rs. 94 crores, from Rs. 1,427 crores a year earlier, regulatory filings show. The mortgage lender said it has a healthy liquidity cover of 12 months with cash reserves at over Rs 12,000 crore to Rs 14,000 crore. The company said it continues to maintain one year principal repayments as cash cover. It’s capital adequacy ratio stood at 27%.