HinDuja-owned Ashok Leyland is set to float a non-banking finance company (NBFC), a vehicle financing arm, which will finance its commercial vehicles.
Earlier, Ashok Leyland Finance, an NBFC owned by Hindujas was merged with Indus Ind bank for achieving greater synergies.
The proposed NBFC, to be titled as Hinduja Leyland Finance, will restrict its financing activities to Leyland trucks only.
The company is eyeing north-east, Orissa, Uttar Pradesh and Madhya Pradesh. Talking to FE on the sidelines of signing an MoU with Central Bank of India for vehicle finance in Mumbai on Tuesday, K Sridharan, chief financial officer, Ashok Leyland said ?Within a couple of weeks, we will send an application to the RBI seeking licence for our forthcoming NBFC arm. If all goes well, it will start operating by September.?
The idea is to position the company?s captive finance arm at places where banking system is not present, Sridharan said.
The company will have its capital base of Rs 100 crore in the initial base. Sridharan said initially the company will eye sale of 1,000-1,200 vehicles, which may go up to 5,000 after one year. If it happens, the share of truck sales through the finance company will go up to 5% of the total sales within one year, Sridharan said.