Loan growth may moderate in FY24, RBI may take a long pause over rate hikes: Andromeda

Andromeda, a loan distribution network in India, has recorded 63 per cent rise in the loan disbursals to Rs 60,000 crore for the financial year 2022-23. The company has seen a strong performance across all segments of its loan business.

More than three decades old Andromeda mainly caters into loan distribution products including home loans, personal loans, business loans and loans against property. It had recorded a loan disbursement of Rs 36,842 crore in FY22, which stood at Rs 15,333 crore in FY19. It is expecting a moderate growth of 12-15 per cent in the new fiscal year.

Even after the interest rate hikes, consumption is driving the demand in all the segments, said Raoul Kapoor, Co-CEO of Andromeda Sales and Distribution. After six consecutive rate hikes, the Reserve Bank of India took a hiatus from monetary tightening earlier this month. Kapoor said, "Higher interest rates are here to stay."

Andromeda observed three major trends across the three geographical vertical of the country. Kapoor said that the average ticket size of loans is increasing in metro cities, while the number of files or applications in increasing Tier-I and Tier-II cities. Even in the Teir III and Tier IV cities, there is an aspiration to upgrade their lifestyles.

Andromeda disbursed home loans worth Rs 26,328 crore in the year ended on March 31, 2023, about 50 per cent higher from the previous year's home loan disbursal of Rs 17,505 crore.

"Exponential rise in the home loan demand last for almost two year, when covid-19 hit and this was a more than expected duration. However, the demand in the home-loan segment is back to previous normal. There will some moderation in the growth of demand in the segment," said Kapoor.

He said that the affordable housing segment is facing two major challenges- first being the limited supply of the inventories and secondly, the rising cost of money and construction is making it difficult to keep the margins intact in the segment.

Andromeda's personal loan disbursal rose more than 59 per cent to Rs 6,551 crore in FY 22-23, which was Rs 4,119 crore in the previous financial year.

Commenting on the personal loan segment, Kapoor said that average ticket size in the metro cities has shot up to Rs 12-14 lakh from Rs 8-10 lakh in the pre Covid period. He said the personal loan is comparatively cheaper as there is cut-throat competition in the segment.

Andromeda disbursed Rs 20,649 crore as loans against property in the financial year 2022-23, up 79 per cent from the previous fiscal at Rs 11,556 crore. Its business loans disbursals rose more 101 per cent to Rs 5,525 crore from Rs 2,742 crore during the period under review.