Manappuram Finance expects gold loan growth of 12-18% for FY25
VP Nandakumar, MD & CEO of Manappuram Finance, expects a slight decline in net interest margin (NIM), he is confident that the company will maintain its target return on equity (RoE) of 20% for the year.
Demand for gold loans has increased significantly this year as people, especially from the middle income group, needed funds post-Covid, says VP Nandakumar, MD and CEO of Manappuram Finance.
“Our average ticket size is around ₹70,000-75,000 and the average life of the loan is for three months. The customers are mostly from the upper middle class and lower middle class, their requirement for money is the catalyst for our growth," he said.
Nandakumar also talked about the planned initial public offering (IPO) of Asirvad Microfinance, a non-banking microfinancier and a subsidiary of Manappuram Finance.
Nandakumar said the draft red herring prospectus (DHRP) has been filed and the launch is expected in the next 2-3 months.
The Reserve Bank of India (RBI) recently reiterated that non-banking financial companies (NBFCs) cannot give loans over ₹20,000 in cash.
Nandakumar said this rule has been beneficial for Manappuram Finance as a large portion (63%) of their loans are already given out online through bank accounts, and 23% are small loans under ₹20,000.
Because of their established online processes, the new regulation has had a positive impact on the company.
Nandakumar also discussed the growth of their non-gold loan portfolios, which include vehicle and MSME (micro, small, and medium enterprises) loans.
Last year, these segments grew by over 50%, and Nandakumar expects this growth rate to continue. The combined portfolio for these loans was around ₹5,000 crore, and they anticipate another 50% growth this year.
Although Nandakumar expects a slight decline in net interest margin (NIM), he is confident that the company will maintain its target return on equity (ROE) of 20% for the year.
The company, which has a market capitalisation of ₹15,460.13 crore, has seen its shares gain 53% over the last year.
Also Read | RBI-directed special audit at IIFL Finance concludes: When will restrictions be lifted?
“Our average ticket size is around ₹70,000-75,000 and the average life of the loan is for three months. The customers are mostly from the upper middle class and lower middle class, their requirement for money is the catalyst for our growth," he said.
Nandakumar also talked about the planned initial public offering (IPO) of Asirvad Microfinance, a non-banking microfinancier and a subsidiary of Manappuram Finance.
Nandakumar said the draft red herring prospectus (DHRP) has been filed and the launch is expected in the next 2-3 months.
The Reserve Bank of India (RBI) recently reiterated that non-banking financial companies (NBFCs) cannot give loans over ₹20,000 in cash.
Nandakumar said this rule has been beneficial for Manappuram Finance as a large portion (63%) of their loans are already given out online through bank accounts, and 23% are small loans under ₹20,000.
Because of their established online processes, the new regulation has had a positive impact on the company.
Nandakumar also discussed the growth of their non-gold loan portfolios, which include vehicle and MSME (micro, small, and medium enterprises) loans.
Last year, these segments grew by over 50%, and Nandakumar expects this growth rate to continue. The combined portfolio for these loans was around ₹5,000 crore, and they anticipate another 50% growth this year.
Although Nandakumar expects a slight decline in net interest margin (NIM), he is confident that the company will maintain its target return on equity (ROE) of 20% for the year.
The company, which has a market capitalisation of ₹15,460.13 crore, has seen its shares gain 53% over the last year.
Also Read | RBI-directed special audit at IIFL Finance concludes: When will restrictions be lifted?
(Edited by : Shweta Mungre)
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