Gold loan major Manappuram Finance says it is constantly evaluating new opportunities and will take a call on new business verticals at the appropriate time. The company will continue with the strategy of diversification while not letting its guard down on the gold loan vertical, VP Nandakumar, MD & CEO tells Sajan C Kumar, in an exclusive interaction. According to him, the demand for gold is steady, despite price volatilities and this augurs well for the gold loan industry. Excerpts:
Q: Given the price volatilities, your outlook on gold loan growth of the company for FY24?
Our gold loan portfolio grew by over 8% year-on-year, in the just concluded September quarter of current fiscal. There has been 403,000 new customer additions during the just concluded quarter, taking the number of live customers to 2.46 million. Sequentially, though the growth in gold loan book has been marginal, the demand for gold is steady despite price volatilities and this augurs well for gold loan industry. The current quarter as well as Q4 are expected to show good results, if we go by the patten seen in the previous fiscals. So, we expect to close the fiscal with at least 8-10% growth in gold loan AUM.
Q: How has been the growth of other business verticals during Q2FY24?
A: The growth has been even and across the board. Our non-gold portfolio has been performing well. Our microfinance book registered a growth of 43% y-o-y and has reached an AUM of `10,950 crore. In the case of vehicle and equipment finance portfolio, our yearly growth has been an impressive 66% while we grew our home finance book by 42%.
Q: Company’s non- gold loan business now accounts for 47% of your consolidated AUM. What are your future plans on that front?
A; We are close to our aim of achieving a gold versus non gold mix of 50: 50. We will continue with the strategy of diversification while not letting our guard down on the gold loan vertical. In line with our strategy to optimise returns from gold loan book, we are pursuing online gold loan and doorstep gold loan in a much more focused manner. On the non-gold book, microfinance continues to show a lot of promise while we will augment our operations in vehicle, home finance and corporate loans.
Q: With two quarters remaining in the current fiscal, what is your outlook for consolidated AUM growth for FY24?
A: We are targeting a consolidated AUM growth of 15-20% y-o-y. We will fire from all cylinders with microfinance, vehicle finance, home finance and the new non-gold verticals contributing to AUM growth. We are constantly evaluating new and emerging opportunities and will take a call on new business verticals when the right opportunity arrives.
Q: What is the update on Asirvad Microfinance IPO, after filing the papers in October? Any fund raising plan for Manappuram Finance?
A: We have already filed the Asirvad Microfinance DRHP with market regulator SEBI and it is being processed. If the microfinance IPO proceeds as per the plan, we will receive Rs 1,500 crore as capital which will be leveraged for lending. Even otherwise, we are well capitalised and have sufficient liquidity. The company’s capital adequacy ratio (for the standalone entity) was at 30.7% at the end of second quarter of FY24.