While the second wave of the pandemic impacted, not just the tourism sector, but also all other contact intensive businesses in the country, tourism financing institution was able to pave the way for a promising FY 22, with an 8 per cent growth in its AUM and a 10 per cent rise in Net Interest Income to Rs 1980 crore and Rs 32 crore respectively for the quarter ended June 30, 2021.
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TFCI (Tourism and Finance Corporation of India) on Wednesday reported a 28 per cent (Rs 21 crore) YoY rise in quarterly profits, registering another robust quarter, following its steady performance in FY 21, indicative of a strong recovery path ahead.
While the second wave of the pandemic impacted, not just the tourism sector, but also all other contact intensive businesses in the country, India's premium tourism financing institution was able to pave the way for a promising FY 22, with an 8 per cent growth in its AUM and a 10 per cent rise in Net Interest Income to Rs 1980 crore and Rs 32 crore respectively for the quarter ended June 30, 2021.
In spite of travel restrictions and nationwide lockdowns disrupting the earnings and growth of the sector, TFCI has been actively transforming the tourism landscape into one that represents handholding its customers by providing innovative solutions in these trying times. With healthy financials, and continued profitability, TFCI has been actively chartering a roadmap for not only creating the right environment towards better tourism, but also helping in creating a sustainable ecosystem. Further, TFCI has been instrumental in extending assistance to its clients under the 'Atmanirbhar Bharat' Package.
The same was also recognised by the Ministry of Tourism in their press release earlier this month. It was highlighted therein that 31 MSME units were sanctioned Rs 234.7 crore during 2021 as part of the ECLGS scheme by TFCI under the said package.
Some of the factors contributing to TFCI's positive earnings include its deep understanding of the sector, an eye for valued investments, portfolio spread across the country and segments, etc. To ensure the momentum even amidst a period of relative slowdown, the company has been continually growing its balance sheet size, by aggressively pursuing the emerging opportunities which would enable it to leverage its capital base (CAR of 41.95% as on June 30, 2021). Also, the low leverage in its balance sheet provides ample opportunities of growth. What is commendable, is its ability to show improvement in key metrics viz., ROE and ROA to 10.57 per cent and 3.84 per cent respectively in Q1FY22. Further, while the asset quality remained stable, TFCI's MD & CEO, Mr Anirban Chakraborty expects resolution in couple of its stressed assets during the current fiscal which shall further improve its profitability.
To further augment its liquidity, the Board of TFCI in their meeting on August 10, 2020 approved raising of equity capital by way of preferential allotment/QIP or rights issue for an amount up to Rs. 200 crore.
The experienced team at TFCI has also been spearheading novel initiatives post COVID-19, aimed at diversification. The specialized NBFC is now going beyond tourism financing and is looking at financing viable projects with adequate security cover. While it has been seizing the several opportunities presented in the MSME segment, a portfolio of long-standing relationships who greatly value the assistance given by TFCI during the difficult pandemic, have further strengthened the firm's financial performance.
The second wave of pandemic has been quite hard for various businesses. The recovery from first wave was dented due to the sudden surge in infections, consequent lockdown and various other restrictions. However, rapid reopening of businesses and huge pent-up demand of leisure travel is being witnessed across the country. In fact, even city hotels are getting higher bookings from its Staycation and Workation customers. With the return of consumer confidence, in the back of substantial reduction in fresh cases and rapid vaccination drives; the return to normalcy is round the corner.