The company's impairment on financial instruments for the March quarter stood at Rs 2,039.05 crore against Rs 102.61 crore in the corresponding quarter of the previous financial year.
Edelweiss Financial Services on July 4 reported a consolidated net loss of Rs 2,281.55 crore for the fourth quarter of the financial year 2020, against a profit of Rs 246.32 crore in the corresponding quarter of the previous financial year due to a massive impairment based on revisions in the expected credit loss and impact of COVID-19.
The company reported a conservative stance adopted on impairments, with total impairment of Rs 2,549 crore recorded in Q4FY20.
Total revenue from operations came at Rs 1,935.40 crore in Q4 FY20 which was 36 percent lower year-on-year (YoY) against Rs 3,035.62 crore reported in Q4 FY19.
The company's impairment on financial instruments for the March quarter stood at Rs 2,039.05 crore against Rs 102.61 crore in the corresponding quarter of the previous financial year.
Change in valuation of credit-impaired loans for the March quarter stood at Rs. 510.35 crore against Rs. 82.50 in the corresponding quarter of the previous financial year.
The company said it had a fairly comfortable liquidity position with liquidity at 24 percent of the borrowings as on March 31, 2020.
"Asset quality is being reviewed as part of risk management and provisioning assessment. With sufficient capital, liquidity and ability to raise funds provide adequate support that the company would continue to fulfill all required contractual obligations," Edelweiss said.
The management believes that the company will be able to pay its obligations as and when they become due in the foreseeable future.
"The company would continue to focus on maintaining adequate capital and ensuring liquidity at all points in time," it said.
As per the company, its three NBFC subsidiaries had initiated the sale of certain financial assets before March 31, 2020, and for which definitive contracts were executed post the balance sheet date.
"These financial assets sold subsequent to March 31, 2020, amounted to Rs 1,657 crore to alternative assets fund and asset reconstruction companies trusts," it said.
Rashesh Shah, Chairman & CEO, Edelweiss said: “In this quarter, we have taken three conscious decisions based on our experience and that of our Board: the markdown and sell-down of our corporate asset book, accelerating to capital-light model in retail credit, and the proposed equity raise at Edelweiss and in our Wealth & Asset Management business. These measures will further strengthen both our balance sheet and our dominant franchises. As the economy recovers over the next few quarters, our businesses will be well-poised to grow strongly.”