To diversify its business and expand in other parts of the country, Kerala-based Manappuram General Finance & Leasing is looking to invest Rs 2,000 crore in 50 jewellery retail outlets over the next five years. The company also plans to issue qualified institutional placement (QIP) this month to raise Rs 1,000 crore for meeting its capital requirements. Manappuram Group chairman VP Nandakumar tells FE’s Ajay Sukumaran about the group’s plans.
What are your plans in the jewellery retail business?
We see lot of opportunity in jewellery retail business, like gold loan business. We want to list the company by 2015 on major stock exchanges. This will be a separate company from the same group. We started operations six months ago and we have two stores. By the end of this year, we will have 10-12 stores and in five years we will have a minimum of 50 stores. By the end of this fiscal, we expect a turnover of Rs 50 crore from the jewellery business. It is not big, I admit, but we are a new entrant.
Are your expansion plans focused on South?
We will be expanding in all the major cities in India and in West Asia.
What is Manappuram General Finance’s growth plan?
This year we have budgeted a loan book portfolio of Rs 4,500 crore, whereas we have achieved Rs 5,000 crore in half a year. We have grown almost 100%. We expect to grow beyond Rs 8,000 crore this year. The disbursal (of loans) will be around Rs 25,000 crore this year. We will be opening 300 more offices of which 250 will be in all the four states in South and the rest in the remaining parts of the country. Our expansion, in percentage terms, in the north will go up. For the gold loan business, we have received invitations from a few foreign banks like Bank of Ceylon to form a joint venture. We are working on it. Very soon we are going to have another company to look at the international business.
How soon will this company be set up and do you see a big opportunity abroad?
Probably, next year. We have been working on it and are still in the process of discussion. We believe it is a big opportunity. We have not tested the market. I hope 2011 will be a landmark year where we will be starting international operations for Manappuram Gold Loan. Jewellery, we definitely have a plan to go abroad.
What are the other sectors you plan to diversify into?
We are diversifying into healthcare also. In the next two years, our focus, apart from our gold loan business, will be on jewellery retailing and healthcare. We will have different sub-verticals such as dental and diagnostic chains. We have just started with two dental clinics and two diagnostics centres in Kerala. Our plans is to take it pan-India and abroad.