Magma Shrachi Finance Ltd, a retail asset finance company, is planning to increase the passenger car and construction equipment financing this fiscal.
The Rs 20,000-crore construction equipment financing market is growing at a rate of 20%. Magma Shrachi, which earns 27.1% of its revenues from the sector, expects to increase its presence here. Magma’s revenues in the segment during 2007-08 was Rs 952 crore, up 74.9% compared with the year-ago period.
Magma Shrachi is also betting big on the passenger car finance business following increase of its market share to 3% in the last quarter of 2007-08.
The merged entity of Magma Leasing and Shrei Infrastructure Finance tied up with Mahindra & Mahindra in February this year, followed by agreements with Hyundai Motor and General Motors in April and March 2008, respectively.
“We expect our market share in the passenger car finance business to grow post tieups,” said Sanjay Chamria, vice-chairman and managing director of Magma Shrachi.
Commercial vehicle financing, which contributed to 55% of Magma’s revenues even two years back, has come down to 39.5% in 2007-08. It may dip further to 30-32% this fiscal, said Chamria.
The company managed to grow at a rate of 20% in the commercial vehicle financing business in 2007-08, way above the industry growth rate, with increased dealer penetration, entry into newer markets and merger. “We don’t expect the sector to rebound this year,” Chamria said.
With a base of 1.80 lakh ‘live customers’, Magma Shrachi has increased disbursal to Rs 3512.8 crore in 2007-08, up 38% compared with Rs 2544.1 crore in the previous fiscal. The company posted a net profit of Rs 50.54 crore in 2007-08, a jump of 61% over Rs 31.4 crore achieved in 2006-07.
The asset under management also grew by 29% to Rs 7412.30 crore in 2007-08. Ravi Todi, joint managing director, said: “Disbursement increased by 38% to Rs 3512.8 crore in 2007-08 and will continue to rise in the current fiscal.”
The company received almost 13.6% of its revenue from Orissa, followed by Chhattisgarh and Madhya Pradesh (13.4%), Punjab and Himachal Pradesh (11.5%), Andhra Pradesh (11.3%) and West Bengal (8.8%).
