Aditya Birla Nuvo has infused Rs 300 crore into its non-banking finance company (NBFC) Aditya Birla Finance (ABF) to fund its two-pronged expansion plans. ABF?s current capital base is estimated at Rs 250 crore. The finance company plans to foray into retail lending against marketable securities as well as long term lending for mid-sized firms.
Sudhakar Ramasubramanian, chief executive officer, ABF, said, ?We would be offering retail loans against shares or securities like mutual funds and bonds with a ticket size of 30-40 lakh. The offering would be meant for high networth individuals, promoter?s funding and brokerages.? For the proposed product, a customer will have to pledge his shares/securities worth double the amount he borrows. For example, to get a loan of Rs 50 lakh, a customer needs to pledge Rs 1 crore worth of shares/securities, which has to be in accordance with the ?approved list of securities? to be prepared by ABF risk management team.
Currently, loan against securities (with a ticket size of 1-3 crore) forms 67% of the company?s total loan book. The NBFC is planning to double its loan book to Rs 3,000 crore by 2010-11 through aggressive expansions, according to Ramasubramanian.
Ramasubramanian said, ?There is a dearth of funding in infrastructure space or for mid size companies with net worth of around Rs 100-500 crore. We will try to market our products through dealers and suppliers of our group companies who know their history well.?