L& T Finance Achieves NBFC-ICC Status from RBI

L&T Finance Ltd. has officially received its certificate of registration as a Non-Banking Financial Company (Investment and Credit Company) from the Reserve Bank of India (RBI) as of August 2. This transition marks a shift from its previous registration as an NBFC-Core Investment Company (NBFC-CIC), following the merger with its wholly owned subsidiaries, L&T Finance, L&T Infra Credit Ltd., and L&T Mutual Fund Trustee Ltd. The company further  stated that this change would not impact its compliance with NBFC-ICC guidelines.

Financial Performance

L&T Finance Ltd. has reported impressive financial growth in recent quarters. For Q1FY25, the company recorded a consolidated net profit of Rs.685 crore, marking a 29% year-on-year increase. This profit is the highest ever reported by the company, showcasing its good financial health/ The company’s consolidated loan book also saw significant growth, rising 13% year-on-year to Rs.88,717 crore as of June 30. Notably, retail loans, which now constitute 95% of the total loan book, reached Rs.84,444 crore.

Market Performance

Despite the positive financial results, the company’s stock performance showed a slight decline. Shares of L&T Finance Ltd. closed 0.77% lower at Rs.167.23 apiece, compared to a 0.26% decline in the NSE Nifty 50. However, the stock has experienced an upward trend over a longer period, with a 2.31% rise year-to-date and a 3% increase over the past years.

Conclusion: In conclusion, L&T Finance Ltd.’s transition to an NBFC-ICC status is a move following its successful merger and consolidation of subsidiaries. The company’s financial performance, particularly the record net profit and substantial growth in its loan book, underscores its market position. Despite a minor dip in stock prices, the long-term growth trajectory remains positive. This  NBFC-ICC status from the RBI is a testament to L&T Finance Ltd.’s plans for compliance, growth, and delivering value.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.