Before you read this 2020 Annual report takeaways article, you can read everything you need to know about Manappuram and the Gold Financing NBFC sector here. This will bring you up to speed and help you grasp everything in the article below.

Quick Facts

Year went by

Signed a Memorandum of Understanding (MoU) with Autolite (India) Ltd. (AIL) for a consumer and dealer financing agreement for electric vehicles. AIL is a manufacturer of electric vehicles (two-and three-wheelers) with lithium-ion battery packs and solar products.

Infused Rs 2,640 million in Asirvad Microfinance through a rights issue. After this transaction, Manappuram will hold a 93.33% stake in the microfinance entity.

Received funding worth $35 million from the International Finance Corporation (IFC), a member company of the World Bank group. IFC may also provide advisory services to bring global best practices to their risk management systems and help them build capacity in MSME lending.

Asirvad Microfinance achieved a milestone of reaching  Rs 10 billion of AUM in Tamil Nadu, offering micro-finance to over  4.5 lakh women members.

CRISIL upgraded the credit rating of long-term debt instruments to ‘CRISIL AA/Stable’ (from CRISIL AA-/Positive)  and reaffirmed its ‘CRISIL A1+’ rating on commercial paper.

Their subsidiaries also received an upgrade on long-term credit ratings. According to the rating rationale released by CRISIL, the upgrade factors in healthy asset quality, steady growth in the gold loan business, growing diversity in other asset classes and strong profitability and return on assets

Manappuram Home Finance Ltd. raised about   Rs 1,000 million via Non-Convertible Debentures (NCDs) with coupon rates between 9.75% and 10.65% depending upon the tenure. These NCDs were rated as ‘AA-’ by CARE Ratings.

Raised $300 million via three-year bonds by way of senior secured fixed rate notes issuance for a three-year tenure. The issue was placed with a coupon of 5.90%

Segment Updates

Consolidated financial metrics

The gold loan market is expected to reach Rs 4,617 billion by 2022 at a five-year compounded annual growth rate  (FY18 to FY22) of 13.4% according to a recent KPMG report.


In our digital journey, the next logical step is to consolidate our IT infrastructure across group companies and move to a modern, secure cloud. After a lot of due diligence, we chose Oracle’s second-generation cloud infrastructure. With this move, we are looking to realize 2-3 times improvement in performance vis-à-vis our current IT setup, in addition to achieving 30-40% in cost savings over the next five years.


Local marketing Village campaign, loan mela, shop visit, home visit and pamphlet and brochure distribution

Consumer connect

Door-to-door awareness campaigns in villages and at gram panchayat levels with emphasis on establishing personal connect

Digital campaigns OGL Lite application, along with various advertisements and outreach activities on social media

Celebrity allure

Many renowned celebrities from the Indian film industry have endorsed their brand including Venkatesh, Mohan Lal, Puneeth Rajkumar, Vikram, Akshay Kumar, Jeet, Sachin Khedekar and Uttam Mohanty

Management team

NBFC Industry 

The Economic Survey 2019-20 highlighted the current NBFC crisis as a key challenge that could choke credit growth and impede India’s economic growth targets. NBFCs have been a useful complement to commercial banks, helping to meet the nation’s financing needs in infrastructure, and among retail and business class. The sector has recently experienced a downturn, leading to liquidity issues among some NBFCs. Many of these non-banks face asset-liability mismatches, having borrowed the short term to lend long term. They largely depend on commercial banks and market funds for financing. Thus, some banks have exposure to weakness among NBFCs.

NBFCs’ borrowing profile has changed significantly from capital market instruments to bank borrowings. Lending by banks to NBFCs registered a growth of 34.7% from September 2018 to January 2020, as per CARE Rating. Banks’ advances to NBFCs stood at Rs 7.37 trillion as of January 2020 compared to Rs 5.47 trillion in September 2018. NBFCs’ borrowing from mutual funds, however, has seen a consistent decline for the last six quarters. Their borrowing from MFs through commercial papers and corporate debt stood at Rs 1.69 trillion as of end-January 2020 from Rs 2.25 trillion in September 2018.

Although the balance sheet size of the NBFCs constitutes 18.6% of Scheduled Commercial Banks (SCBs), it has emerged as an important pillar of the Indian financial system. The sector, which had witnessed a robust expansion in 2017-18, experienced headwinds in 2018-19 and 2019- 20 as market sentiments turned negative post-IL&FS event and recent defaults by some companies.

Credit Rating

Consolidated results at a glance

The company is in the gold business for a very long time and still borrowing at 9%+ (upto 11%) speaks about the kind of risk perception banks and other lenders have on the company.

Auditor payments

Concentration of Advances, Exposures and NPAs

Independent Auditor’s report

The attrition rate for Manappuram Home finance is high at 50%!


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