Chennai-based NBFC Five-star Business Finance is looking to clock a 35% growth in assets under management (AUM) for the next three years.
G Srikanth, chief financial officer, told FE that the growth will be coming from three levers – increase in branches, additional field officers per branch and hiking of average loan ticket size from Rs 3.5 lakh to Rs 4.5 lakh.
The company had clocked an AUM of Rs 6,915 crore in FY23, compared with Rs 5,067 crore in FY22, registering a growth of 37%.
“ We know how customers are going to behave during various points of times. We had put in place a very good business model after completely understanding the client segments. Now, we are confident of being able to grow at 35% year-on-year, going forward,” he said.
Srikanth said opportunities for the company are immense and it has been giving the guidance of an AUM of growth of 30-35% in recent analysts calls. “In fact, we have now revised up the guidance to 35%, given the growth trends we are expecting,” he said.
Elaborating on the expansion of the business, he said the company is betting on three levers of growth. “Our growth is going to come from three levers. First is increase in branches, historically we have demonstrated the ability to open 60 branches year-on-year. Whenever you open new branches, we appoint new field officers which is going to bring me incremental business,” he said.
The second lever, according to him, is increasing the average number of officers in the existing branches. “Three-four years ago, we were operating with 4-5 officers per branch, that number is already at 8, and can go up to 10 to 12 over the next three years. Those additional people will bring incremental business,” he said,
Srikanth said the third lever would be increase in the average loan ticket size, which currently ranges between Rs 3 lakh and Rs 3.5 lakh. The company had consciously brought it down during the Covid period to Rs 2.5 lakh.