Manappuram Finance expects Rs 5,000 cr AUM from new verticals

Diversified gold loan NBFC Manappuram Finance expects new business verticals to account for Rs 5,000 crore and gold loan business contribution to touch Rs 15,000 crore to the consolidated assets under management in three years.

Manappuram will be raising Rs 2,000 crore from listed non-convertible debentures this fiscal.

Manappuram had diversified into micro finance by acquiring Asirvad last year. Asirvad with presence in Tamil Nadu, Kerala, Odhisa and Gujarat, will operate pan-India in three years. The company will be infusing capital of Rs 150 crore into the business. Similarly housing loan, loan against property and commercial vehicle financing is expected to grow with the opening of 400 new branches. The company also plans to open around 300 branches for the gold loan business and set apart a total capex of Rs 350 crore for the businesses in three years.

“The new verticals contribute to five per cent of the consolidated AUM now and their contribution will grow to 25 per cent in three years. By then the consolidated AUM should grow to Rs 20,000 crore from Rs 10,153 crore as of Q1 FY16. The target is to grow micro finance business to around Rs 2,000 crore and other three verticals into Rs 1,000 crore each. We may look at direct financing as well acquiring loan portfolios,” said V P Nandakumar, MD and CEO of Manappuram Finance.

The company aims at growing gold loan business with a standalone AUM of Rs 9,656 crore as of Q1 FY16, by Rs 2,000 crore each year for the next three years. For lending purposes, the company will raise Rs 2,000 crore through listed NCDs this year. Till now, it has raised Rs 200 crore from NCDs.

The standalone AUM grew 4.3 per cent in Q1 over the previous quarter. Despite AUM getting back to growth path after the LTV restrictions were eased and rationalised, it is yet to return to the peak level of Rs 12,500 crore in 2011.

“The gold holdings in Q1 at 56.9 tonnes are higher than 53 tonnes at the peak level in 2011. The current gold prices are much lower than 2011 levels of Rs 29,000 per 10 gm. Further, we were offering 90 per cent loan-to-value during the pre-restriction period, while now the average LTV has come down to 59 per cent. These are restraining us from getting back to the peak AUM levels. However, we expect to return to that level in FY17,” said Nandakumar.


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