Muthoot Fincorp, the flagship company of the Muthoot Pappachan group, is planning to increase its non-gold mix to 30% in the next five years from the current 11%. The company will simultaneously maintain its focus on the gold loan segment.
“While the gold loan portfolio is estimated to grow, the other business will grow much faster because they are starting on a lower base,” Muthoot Fincorp chief executive officer (CEO) Shaji Varghese said.
In addition to gold loans, the company offers mortgage loans of up to Rs 25 lakh and secured business loans to retailers.
“We offer credit for productive purposes like business expansion and creating jobs. So, our loans do generate income and it becomes an economic driver,” he said.
Muthoot Fincorp’s consolidated net profit rose 62% year-on-year (y-o-y) to Rs 1,048 crore in 2023-24 (April-March). Its assets under management (AUM) rose nearly 27% y-o-y to Rs 33,359 crore as on March 31. Disbursements rose 18.6% y-o-y to Rs 61,703 crore.
The company disbursed nearly Rs 2,603 crore through co-lending in 2023-24. It has co-lending partnerships with UCO Bank and DCB Bank.
In 2023-24, the company raised Rs 905 crore through issuance of non-convertible debentures. The outstanding bank borrowings stand at around Rs 15,306 crore as on March 31.
While Varghese declined to provide a guidance for AUM growth, he remains confident of the company’s growth prospects going ahead. “Definitely, it (assets under management) will grow. We have an aspiration and identified opportunity to grow faster than the industry average,” he said.
Muthoot Fincorp has received licence from the Reserve Bank of India (RBI) to open an additional 200 branches, which will aid its overall growth. It plans to complete the rollout of these branches by September 30.
The company is also focusing on reaching more customers through its mobile application, Muthoot Fincorp ONE. Currently, the mobile app has over 1.4 million customers, and around 85% of customer onboarding is done digitally.
“There are various products and services which we offer in the branches. We are creating a virtual branch in the mobile app,” Varghese said. “But we will continue to play on the physical infrastructure which we have built over so many years. Digital will play a huge role in service delivery,” he added.
