VP Nandakumar, chairman of the Manappuram Group, tells FEs Ajay Sukumaran the groups plans for separate ventures in jewellery retail and healthcare besides giving an outlook for its flagship company, Manappuram Finance, a listed company in the business of lending against gold. Excerpts:
You plan to list the jewellery retail company by 2015. How much revenue do you aim to touch by then
By that time, our sales will cross R5,000 crore. We will have more than 100 outlets. Last year we had sales of R140 crore with an average shop life of around 3 months.
How many outlets will you add this year
We have 15 outlets now. We will add another 15 this year.
What are your plans for the healthcare business
We started operations a year back in Kerala. We have four centres already and this year we may open another diagnostic centre in Bangalore. For the middle class there is a vacuum in the affordable healthcare segment.
Manappuram Healthcare, which is branded as Smartcare, is targetting the growing middle segment. This year we may invest R100 crore into diagnostic centres and dental clinics. Going forward we will have other verticals like speciality hospitals and general hospitals.
How has the year been so far for Manappuram Finance
Last year, Manappuram Finance opened almost 1,000 branches and we have gone beyond South India. That is the reason we have expanded our asset size. Now, we are managing an asset of more than R10,000 crore from R2,500 crore in FY10, an increase of four times.
What is the outlook for the year in this challenging environment
Challenges exist, definitely, on the liability side and regulatory side. But at the same time, we are trying to contain them effectively by broad-basing our liability.
To my knowledge, the response has been fairly good for our issue of non-convertible debentures whereby we intend to mobilise around R750 crore. Earlier, we were relying more on bank funding. Now we are relying equally on other sources of funding like highly rated NCDs, commercial paper and placing tier two instruments like bonds with leading institutions.
Apart from the NCD issue, are you looking to raise more more funds for expansion
I would say, it may be enough to meet our working capital requirement. We are hopeful we will be able to grow assets by another 20% more this fiscal. That requires additional support for the liability.
What size of loan book are you aiming at
The loan book right now is R10,000 crore. I hope it will be somewhere around R12,000 crore to R13,000 crore by the end of the fiscal. The total disbursements will cross R40,000 crore this year because our disbursements are almost four times of our loan book as the churning is very fast in this product.
What would be the major driver for that
Last year, we opened more than 1,000 branches and this excess capacity will be used now. We have 2,500 branches spread across almost all the states in the country. By the end of the year, we might have around 250 more.