The first thing Sunita Sharma does when she enters office every morning is look at the business figures. "We have three to four important issues like recovery and portfolio. We have the lowest NPAs (non-performing assets) in the industry, but I have set a target of zero NPAs. You have to always be on guard," says the MD & CEO of LIC Housing Finance. But even as she keeps a sharp eye out for the numbers, she has also empowered employees of the organisation in a way that work would carry on smoothly without the need for constant supervision.
'Project auto pilot', as she calls it, had been in the works for nearly two years. "I can sit in my room all day and do nothing. In fact, I am not needed in this organisation because all my heads of department (HOD) are doing a wonderful job," says Sharma, beaming. She has empowered HODs to take decisions, including financial, themselves, keeping in mind quality and SOP (standard operating procedure). She believes that this has brought in a greater sense of responsibility among her employees. "When you have to sign on the dotted line, you will be 10 times more careful than when you don't have to put your signature."
Today, even the deputy regional manager can take decisions on disbursement of loans. The erstwhile multi-layered hierarchy did not allow any financial power or even administrative powers to be exercised. "We have rationalised and streamlined those and given each of them certain powers and responsibilities," she explains. After the success of auto pilot in LIC's Housing Finance's corporate office, she wants to make regional managers and deputy regional managers, followed by operations managers and area managers a part of it, too. "If this happens, the organisation isn't looking back for the next 20-25 years," says a confident Sharma.
The results, she says, are evident - profit per employee has jumped from Rs 70.76 lakh in March 2013 to Rs 96.23 lakh at the end of March 2016. In the same period, the net NPAs have dropped from 0.35 per cent to 0.22 per cent. Business, too, has increased in the same period with loan disbursement increasing from Rs 24,359 crore to Rs 36,151 crore. "We have increased to a level where we can manage the business. Disbursing money is easy, but we are disbursing where we make money." Sharma says.
When she joined in 2013, the company was operating in low margins. Sharma figured that to improve the margins, she needed to distribute high-margin products by taking low risk. "Home loans don't give any margin; and when I came in, builder loans were given to biggies. It was a tough time as we were not making money and there was a high risk of not getting our money (from builders)back." She decided to move from biggies to mid-market size builders, where the margins were higher, by giving loans on an average size of Rs 50 crore.
To improve margins focused on loan against property (LAP), the company tweaked the product to mitigate risk. LAP was given for housing loans and that, too, on self-occupied houses. "You will never default if you are living in the property that has been mortgaged. We also made it a low-margin product, but better than home loans," she adds. The business has grown four-fold in three years, from Rs 3,000 crore to Rs 12,000 crore. The company increased the number of loans as well as ticket size, which improved the margins by 50 basis points, from 2.19 per cent to 2.71 per cent, in three years. This has also seen the stock price on the domestic bourse rise by 155 per cent since November 2013, compared to the 34 per cent jump in BSE Sensex.
Sharma is now gearing up for the next level of growth. She has roped in IIM Calcutta to conduct a study and suggest HR practices that can help the company do "better than the best in the industry". "Unlike three years ago, I have the systems and IT in place to grow at 30 per cent. Once I get the recommendation from IIM Calcutta, I will have to see how much I can hire to achieve higher growth; I can't blindly grow if I don't have the bandwidth to handle growth," Sharma states.
She monitors every employee at LIC Housing Finance. If the need arises, she is known to change salary structure, restructure incentive structure, and even give out-of-turn promotions to people who performed well. "When I came in, there was no monitoring. If we have to take the company to another level, we have to keep a close watch on the performance of people, and, more importantly, recognise and reward them," Sharma says. Instead of letting non-performers go, she believes in guiding and encouraging them to excel. She will soon commence a mentoring programme for her employees. "Before I leave, I would like to formalise mentorship here," she adds.
While the business blooms, the biggest reward for Sharma is "seeing people happy." "When I came in, they didn't have a smile on their faces. Seeing them smile gives me the satisfaction that I could bring some kind of positivity in the organisation," she says. Sharma's emphasis on the well-being of her employees is evident when she says, "Profits go up and down; but bringing happiness in an organisation where people are contributing immensely is a phenomenal achievement."