Manappuram Finance to diversify, cut gold loan business to 50% of portfolio

By: |
Chennai | Published: October 27, 2018 3:00:45 AM

Kerala-based NBFC Manappuram Finance on Friday said it is in the process of diversifying into a slew of verticals like commercial vehicles loan, affordable housing finance and MSME sector lending, beyond its core areas of gold loan and microfinance businesses.

Manappuram Finance, NBFC Manappuram Finance, MSME sector lending, commercial vehicles loan, affordable housing financeSpeaking to reporters here on Friday, VP Nandakumar, promoter, MD & CEO of Manappuram Finance, said the company will be focusing on the MSME sector in a big way.

Kerala-based NBFC Manappuram Finance on Friday said it is in the process of diversifying into a slew of verticals like commercial vehicles loan, affordable housing finance and MSME sector lending, beyond its core areas of gold loan and microfinance businesses. The company, which is into raising of Rs 1,000 crore through NCDs, said it will work to see that the percentage of gold loan portfolio coming down to 50% from the current 75% and the remaining verticals occupying the rest. The company is also planning to enter the personal loan space.

Speaking to reporters here on Friday, VP Nandakumar, promoter, MD & CEO of Manappuram Finance, said the company will be focusing on the MSME sector in a big way. The other interest area of the company will be the commercial vehicles segment as it is income generating and has movable assets. “We want to be an active player in the MSME sector, and will be looking at small home loans, and vehicle financing,” he said.

The company’s assets under management (AUM) is about Rs 17,000 crore and nearly 75% of that is gold loan portfolio. “We want to grow the commercial vehicle portfolio to nearly 20% of our total AUM, now it contributes around Rs 1,000 crore,” he said. Asked if the divesification would trigger any asset-liability mismatch, he said the company has more than sufficient capital adequacy ratio. “Putting all eggs into one box is not good, that’s why the diversification”, he said. Nandakumar said the company lends about 67% of gold value and nearly one-third of the gold value is with the company as security.

On the microfinance business, he said Chennai based microfinance company Asirvad Micro Finance, which was acquired by Manappuram, will be leading the segment’s business. Nandakumar said the company is on the way to become a pan-India player.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1India has placed November crude orders with Iran, says Sunjay Sudhir
2Here are the reasons China’s equity rout is getting even worse
3ICICI Bank Q2 profit falls over 50%, but asset quality improves; key figures in a nutshell