Anil Ambani group may soon be rubbing shoulders with the likes of HDFC and ICICI Bank in the consumer loan business and the foray could give the group a return of more than 20 per cent in the next 3-4 years, a leading investment bank said on Friday.
Reliance Capital, ADAG's financial services arm, is targeting disbursals of about Rs 6,000 crore (1.5 billion dollars) in its consumer loan business by the year-end, analysts at DSP Merrill Lynch wrote in a research note for their institutional clients.
"Its consumer finance foray continues to gather momentum and exceeds our estimates. The company has disbursed almost 400 million dollars (Rs 1,500 crore) of loans and more importantly has tied up with auto dealers, some consumer finance dealers etc," the note said.
The company is targeting all the major segments including home loans, car loans and personal loans.
Its current disbursal mix is 30 per cent personal loans, 20 per cent mortgage, 25 per cent business and 25 per cent car loans.
Projecting a rosy picture for the company in this market - already flushed with players like ICICI Bank and HDFC - DSP Merrill Lynch said: "R-Cap, being a new entrant, is not affected by any legacy credit issues and is managing to capitalise on the growth opportunities, especially as banks seek to reassess their overall portfolios etc."
It is targeting total disbursements of Rs 6,000 crore (1.5 billion dollars) by the year-end "which was much ahead of our current year-end forecast of Rs 3,800 crore," it said.