Fedbank Financial Services (FedFina) ? a fully-owned subsidiary of the Kerala-based Federal Bank ?is planning to raise close to R120 crore as working capital by December end. The NBFC arm of the private sector bank, currently into gold loan, will soon expand its product portfolio by including car loans and loans against property. FedFina also plans to take the number of branches to 300 from the current 100 by the end of the financial year.
P K Mohapatra, deputy general manager & acting head, FedFina, said: ?As part of our expansion plans, we are introducing new products as well as online-based loan facilities. Though we are focusing more on southern makets, we will also be tapping markets like Maharashtra, Goa, Gujarat and other northern states as well.?
The combined stock of gold in Tamil Nadu, Karnataka and Andhra Pradesh is around 40% of the whole country, and the average per capita gold ownership in the southern states is also more than double of the all-India average. With such interesting market demographics, FedFina has already set up about a 100 branches across Tamil Nadu, Karnataka and Andhra in the last seven months.
Dilip Kumar Maloo, VP, & head-finance & company secretary, FedFina, said: ?We have lined up a R120-crore infusion from our parent, Federal Bank, which will happen in December. Going forward, we will be growing more than the industry average of 38-40% and we may also tap the market by way of NCDs as a long-term measure. The company had received R70 crore as working capital from Federal Bank when they started operations.?
The organised gold loan market in India has grown at 8% CAGR over the last 8 years. While the organised market is only 0.12% of total gold stock value of around R40,000 crore, the unorganised market is around 3-4 times of the organised market. FedFina has already disbursed close to 45,000 gold loans in just seven months.