TFCI Reports Standalone 9MFY22 Results; Maintains Positive Outlook

Tourism Finance Corporation of India (TFCI) announced its standalone quarterly results last week, with 9 months’ PAT, stable at Rs. 63 Crore. These numbers come in the backdrop of the waves of pandemic, affecting the hospitality across the globe, accentuated by the latest Omicron variant. 

A report by the UN World Tourism Organization reveals that at the end of 2021, foreign tourist arrivals were lower by 63% as compared to the pre-pandemic scenario. Also, owing to health concerns arising from the onset of the pandemic, travel and hospitality industry has faced difficulties. However, with mass vaccination drive in India, the domestic travel has again resumed, thereby aiding increase in occupancies and ARRs of the hospitality segment.

The India-based financial institution made opportune use of this time. With an eye on its main growth vertical - funding projects related to tourism, TFCI also revealed plans to diversify into new verticals and explore alternate business opportunities. 

TFCI’s MD & CEO, Mr Anirban Chakraborty said, “We can firmly say that, going forward, the company’s profitability will improve noticeably. Now, with the lessening of COVID numbers and the simultaneous opening of the economy, we are spearheading various initiatives, and aiming at diversification. TFCI is now going beyond tourism financing. We are exploring possibilities in other domains, such as financing viable projects with adequate security cover.”

“The second wave of the pandemic has been quite hard for various businesses. The recovery from the first wave was dented owing to the sudden surge in infections, consequent lockdowns and various other restrictions. However, the rapid reopening of businesses and huge pent-up demand for leisure travel is now being witnessed across the country,” he added.

TFCI’s reported a Net Interest Income of Rs 95 Crore, with an AUM of Rs. 1924 Crore for the 9 months period ended December 2021. Its pre-provisioning profit for the said period remained stable at about Rs. 82 Crore. TFCI boasts of having high capital adequacy, with CRAR at 50.24% as on December 31, 2021, one of the highest in the sector. During Q3, the company raised an aggregate capital of Rs. 105 Crore to fuel its future growth. While, equity share capital of Rs 65 crore was raised through preferential allotment of shares, another Rs. 40 Crore was by way of its maiden issuance of Market Linked Debentures (MLD) to marquee investors. TFCI’s book value in December 2021 came in at 100.32, up from 97.18 in FY21. The company’s Tangible Net Worth (TNW) stood at Rs 906.57 crore as on December 31, 2021.

With the lifting of pandemic-induced lockdowns and the gradual normalizing of the country’s economic, cultural and financial realms, there is a marked shift with visible positive change. With an increasing number of persons being vaccinated, issuance of vaccine passports, rise in herd immunity, and marked lowering in the number of positive cases, there is a strong belief across India Inc that growth is not far away. Additionally, the availability of vaccinations and adequate safety measures – such as wearing masks – has lured travellers to make getaway plans after being stationary – read grounded – for nearly two years. All these factors reflect abundant reason for the return of an optimistic outlook for the country’s travel and tourism industry. 

The Union Budget came with its own set of positives for this industry. Allocation of Rs. 2,400 Crore to the Ministry of Tourism in the Union Budget this year (18.42% higher than the previous year) is a big positive. Also, the government’s focus on improving road infrastructure is expected to lead to increased connectivity and enable swift access to remote areas. This move is expected to impact the travel and tourism industry, albeit indirectly, in the long run.

Another impetus in the Union Budget for the hospitality sector –the extension of the Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023, Further, the guarantee cover for the scheme was expanded by Rs.50,000 crore, for hospitality sector taking total cover under ECLGS to Rs. 5 lakh crore which would be a definite plus for the travel and tourism industry.