Karvy Fin set to raise Rs 200 cr this fiscal

Written by Kavitha Venkatraman | Hyderabad | Updated: Nov 19 2009, 05:49am hrs
Karvy Financial Services Ltd (KFSL), part of Karvy Group, an integrated financial services group, is planning to raise Rs 150 crore of debt and Rs 50 crore of equity during the current financial year. While the equity portion will come from the parent company, the debt is likely to be arranged through mutual fund companies and banks.

According to Amit Saxena, chief operating officer of KFSL, the company obtained its licence in April 2009 and started its operations with equity capital of Rs 50 crore. We started doing securities finance and so far have disbursed about Rs 25 crore. Our plan is to have a book size of Rs 250 crore by the end of the current financial year and take it up to Rs 4,500 crore by the end of the fifth year. The money being planned to be raised would be used to cater to the disbursement targets for the year, he said, adding "we are already talking to various mutual fund companies and banks to raise the debt portion of Rs 150 crore".

He said the company is also looking at expanding its product basket in coming months. It would start offering loan against properties probably from January and would introduce a regular gold loan product from the first quarter of the next fiscal. "Loan against properties is a huge market. Our estimate is that the annual disbursement under this product category is about $6 billion (approximately Rs 27,750 crore). Of that, 1/3 is being done by non-banking finance companies and the rest by banks", he said.

The debt to GDP ratio in India is as low as 7% compared to Malaysia and Thailand where it is 35%. In the US, the UK and Australia, the debt to GDP ratio is upward of 100%, leaving a huge opportunity for the company, he added. Karvy as a group has a huge customer base. It has over 2-3 million customers across all its business verticals in about 400 branches in the country.